THE TRANSATLANTIC ECONOMY 2021

Annual Survey of Jobs, Trade and Investment between the United States and Europe

Daniel S. Hamilton and Joseph P. Quinlan Hamilton, Daniel S., and Quinlan, Joseph P., The Transatlantic Economy 2021: Annual Survey of Jobs, Trade and Investment between the United States and Europe Washington, DC: Foreign Policy Institute, Johns Hopkins University SAIS/Woodrow Wilson Center, 2021. © Foreign Policy Institute, Johns Hopkins University SAIS/Woodrow Wilson Center, 2021

Foreign Policy Institute The Paul H. Nitze School of Advanced International Studies The Johns Hopkins University 1717 Massachusetts Ave., NW, 8th floor Washington, DC 20036 Tel: (202) 663-5880 Fax (202) 663-5879 Email: [email protected] www.transatlanticrelations.org

Woodrow Wilson International Center for Scholars Global Europe Program One Woodrow Wilson Plaza 1300 Pennsylvania Avenue, NW Washington, DC 20001-3027 Tel: (202) 691-4000 Email: [email protected] www.wilsoncenter.org

American Chamber of Commerce to the European Union (AmCham EU) Avenue des Arts/Kunstlaan 53 1000 Brussels, Belgium Tel: +32 2 513 68 92 Fax: +32 2 513 79 28 Email: [email protected] www.amchameu.eu Twitter: @AmChamEU

U.S. Chamber of Commerce 1615 H Street NW Washington, DC 20062, USA Tel: +1 202-659-6000 Email: [email protected] www.uschamber.com Twitter: @USCC_Europe

ISBN 978-1-947661-10-3 THE TRANSATLANTIC ECONOMY 2021

Annual Survey of Jobs, Trade and Investment between the United States and Europe

Daniel S. Hamilton and Joseph P. Quinlan Paul H. Nitze School of Advanced International Studies, Johns Hopkins University Woodrow Wilson International Center for Scholars

Table of Contents

ii Key Findings

iv Preface and Acknowledgements

v Executive Summary

1 Chapter 1: Time to Heal: The Transatlantic Relationship in 2021

15 Chapter 2: Jobs, Trade and Investment: Enduring Ties that Bind

31 Chapter 3: The United States, Europe and China: Different Now, But Changing Again

41 Chapter 4: The Digital Acceleration

59 Chapter 5: The 50 U.S. States: European-Related Jobs, Trade and Investment

71 Chapter 6: European Countries: U.S.-Related Jobs, Trade and Investment

85 Appendix A: European Commerce and the 50 U.S. States: A State-by-State Comparison

137 Appendix B: U.S. Commerce and Europe: A Country-by-Country Comparison

172 Notes on Terms, Data and Sources

174 About the Authors

i - THE TRANSATLANTIC ECONOMY 2021 THE TRANSATLANTIC ECONOMY 2021

16 million jobs on both sides of the Atlantic

Half of total global personal consumption

$6.2 trillion in total commercial sales a year

One third of global GDP (in terms of purchasing power)

ii - THE TRANSATLANTIC ECONOMY 2021 Thriving Together No two other regions in the world are as deeply integrated as the U.S. and Europe

Digital Innovation

of digital content is R&D spending 75% produced in North U.S. affiliate R&D in America and Europe $33 billion Europe (2018) $45 billion European affiliate more data flows via R&D in the U.S. (2018) 55% transatlantic cables than over transpacific routes

Investment Jobs

64% of global investment Workers into the U.S. comes 4.9 million U.S. companies in Europe from Europe (2019) (Direct jobs due to investment, 2019)

5 million European companies in 60% of U.S. global investment goes to Europe (2019) the U.S. (Direct jobs due to investment, 2019)

Trade in goods Trade in services

$466 billion U.S. goods imports $345 billion U.S. to Europe from the EU + UK (2020) (2019) $291 billion U.S. goods exports $245 billion Europe to the U.S. to the EU + UK (2020) (2019)

iii - THE TRANSATLANTIC ECONOMY 2021 Preface and Acknowledgements

This annual survey offers the most up-to-date picture of the dense economic relationship binding European countries to America’s 50 states. The survey consists of six chapters. Chapter One underscores how the transatlantic economy today is structurally sound yet buffeted by considerable political uncertainties. Chapter Two updates our basic framework for understanding the deeply integrated transatlantic economy via “eight ties that bind.” Chapter Three compares transatlantic commercial relations with those the Atlantic partners have with China, including how Daniel S. Hamilton Joseph P. Quinlan supply chains are being transformed. Chapter Four explores the transatlantic digital economy, which in many ways has become the backbone of commercial connections across the Atlantic. Chapter Five offers an overview of European commercial ties with the United States, and Chapter Six an overview of U.S. commercial relations with Europe. The appended charts provide the most up-to-date information on European-sourced jobs, trade and investment with the 50 U.S. states, and U.S.-sourced jobs, trade and investment with the 27 member states of the European Union, as well as Norway, Switzerland, Turkey, and the United Kingdom.

This annual survey complements our other writings in which we use both geographic and sectoral lenses to examine the deep integration of the transatlantic economy, and the role of the U.S. and Europe in the global economy, with particular focus on how globalization affects American and European consumers, workers, companies, and governments.

For this year’s survey, we have opted for a fresh new visual concept. This concept takes a variety of landscapes from the U.S. and Europe, and merges them together. The aim of the concept is to highlight the similarities between the two sides of the Atlantic, which is analogous to our shared history, culture and values, as well as the deep economic ties reported in the study.

We would like to thank Thibaut L’Ortye, Wendy Lopes, Nick Pawley and Garrett Workman for their assistance in producing this study.

We are grateful for the generous support of our annual survey from the American Chamber of Commerce to the European Union (AmCham EU), the U.S. Chamber of Commerce and their member companies, as well as the American Chambers of Commerce in Denmark, Finland, Ireland, Slovenia and Sweden.

The views expressed here are our own, and do not necessarily represent those of any sponsor or institution. Other views and data sources have been cited, and are appreciated.

iv - THE TRANSATLANTIC ECONOMY 2021 Executive Summary

• Despite transatlantic political turbulence and the • Intra-firm trade also accounted for 39% of U.S. COVID-19-induced recession, the U.S. and Europe exports to Europe and 56% to the Netherlands, 37% remain each other’s most important markets. The to Germany and 32% to France. transatlantic economy generates $6.2 trillion in total commercial sales a year and employs up to 16 million The U.S. in Europe workers in mutually “onshored” jobs on both sides of the Atlantic. It is the largest and wealthiest market in • Over many decades no place in the world has the world, accounting for half of total global personal attracted more U.S. FDI than Europe. During the past consumption and close to one-third of world GDP in decade Europe attracted 57.3% of total U.S. global terms of purchasing power. investment – more than in any previous decade.

• Ties are particularly thick in foreign direct investment • Measured on a historic cost basis, the total stock of (FDI), portfolio investment, banking claims, trade U.S. FDI in Europe was $3.6 trillion in 2019 – 60% of and affiliate sales in goods and services, mutual R&D the total U.S. global investment position and almost investment, patent cooperation, technology flows, four times U.S. investment in the Asia-Pacific region. and sales of knowledge-intensive services. • The pandemic-induced recession caused U.S. FDI Transatlantic Investment: Still Driving flows to Europe to vanish, from $344 billion in 2019 the Transatlantic Economy to roughly $0 in 2020. This sharp swing in global FDI to Europe, however, was mainly driven by large • Trade alone is a misleading benchmark of international divestments and negative intra-company loans in the commerce; mutual investment dwarfs trade and is Netherlands and Switzerland (-$150 billion and -$88 the real backbone of the transatlantic economy. The billion FDI flows respectively). Given their one-off U.S. and Europe are each other's primary source and nature, we expect the recent investment declines to destination for foreign direct investment. be temporary. FDI inflows to Europe should bounce back to positive territory in 2021. • Together the U.S. and Europe accounted for 27% of global exports and 32% of global imports in • 2018 and 2019 were atypical years as U.S. companies 2019. But together they accounted for 64% of the repatriated a large amount of foreign earnings outward stock and 61% of the inward stock of global that had been accumulating overseas, in large part FDI. Moreover, each partner has built up the great because of 2017 changes to U.S. tax law. As a result, majority of that stock in the other economy. Mutual holding companies in Europe saw negative U.S. investment in the North Atlantic space is very large, outflows of $47 billion in 2019 while positive FDI of dwarfs trade, and has become essential to U.S. and $56 billion flowed to all other industries in Europe, European jobs and prosperity. resulting in net U.S. FDI flows to Europe of $8 billion in 2019. • European firms based in the U.S. accounted for 57% of the $395 billion in U.S. exports by U.S.- • In the first three quarters of 2020, however, U.S. FDI based foreign affiliates in 2018. German companies outflows to Europe increased to $55 billion, once exported $50 billion from the U.S. in 2018. again accounting for roughly half of U.S. global outflows. U.S. outflows to the Asia-Pacific region • U.S. foreign affiliate sales in Europe of $3.4 trillion during the first three quarters of 2020 declined in 2019 were greater than total U.S. exports to the sharply to $8 billion. Just $1.2 billion flowed to world of $2.5 trillion and roughly half of total U.S. China and $2.1 billion to the BRICs (Brazil, Russia, foreign affiliate sales globally. India and China).

• Foreign investment and affiliate sales drive • Official figures can be misleading when it comes to transatlantic trade. 63% of U.S. imports from the EU the original source and the ultimate destination of consisted of intra-firm trade in 2019 - much higher FDI. For instance, Germany officially accounted for than U.S. intra-firm imports from Asia-Pacific nations only 2.5% of U.S. FDI flows since 2010. Yet much U.S. (around 37%) and well above the global average FDI flows into Germany from neighboring countries. (49%). Percentages are notably high for Ireland Whereas official figures indicate that FDI stock in (87%), the Netherlands (70%) and Germany (70%). Germany from the U.S. in 2017 was $90 billion, “real

v - THE TRANSATLANTIC ECONOMY 2021 FDI” stock from the U.S. to Germany was actually • Total output of U.S. affiliates in Europe ($740 billion) $170 billion. Similarly, “real FDI” links from Germany and of European affiliates in the U.S. ($723 billion) to the U.S. are considerably higher than official in 2019 was greater than the total gross domestic statistics might indicate. The same is true for other product of such countries as Australia, Spain, Mexico important bilateral investment links. or Indonesia.

• In 2019 nonbank U.S. holding companies reported • Aggregate output of U.S. affiliates globally reached negative FDI outflows to Europe of -$47 billion $1.5 trillion in 2019; Europe accounted for 49% of the due to repatriations and/or divestments. Nonbank total. holding companies accounted for 54% of total U.S. FDI stock in Europe in 2019. • U.S. affiliate output in Europe ($720 billion) in 2018 was roughly double affiliate output in all of Asia • Excluding holding companies, total U.S. FDI stock ($386 billion). U.S. affiliate output in China ($77 in Europe amounts to $1.6 trillion – a much smaller billion) and India ($35 billion) lag behind U.S. affiliate figure but still more than 2.5 times larger than total output in the UK ($169 billion), Germany ($85 billion), U.S. investment in the Asia-Pacific region (FDI stock or Ireland ($110 billion). of $635 billion excluding holding companies). • Sales of U.S. affiliates in Europe were double those • From 2000 to 2019, Europe still accounted for over of U.S. affiliates in the entire Asian region in 2019. half of total U.S. FDI outflows globally and more than Affiliate sales in the UK ($724 billion) were more double the share to Asia when flows from holding than double total sales in South America. Sales in companies are removed from the overall figures. Germany ($385 billion) were more than double combined sales in Africa and the Middle East. • America’s capital stock in the UK ($851 billion in 2019) is more than triple combined U.S. investment • The value added of non-financial U.S. businesses in in South America, the Middle East and Africa ($261 the EU28 (¤490 billion in 2017) was more than 6.5 billion). Total U.S. investment stock in China was just times the output of Japanese affiliates (¤75 billion) $116 billion in 2019, only about 14% of U.S. investment and 18 times the output of Chinese affiliates (¤27 stock in the UK. The U.S. investment presence in billion) in Europe. China and India combined – totaling $162 billion in 2019 – is just 19% of total U.S. investment in the UK. • In 2020 the pandemic and recession caused U.S. affiliate income in Europe to fall 15% to an estimated • The UK still plays an important role for U.S. companies $254 billion – still more than 40% larger than during as an export platform to the rest of Europe. U.S. firms the 2009 financial crisis. Europe still accounted for based in the UK export more to the rest of Europe roughly 55% of U.S. global foreign affiliate income in than U.S. firms based in China export to the world. the first nine months of 2020.

• In 2019 Europe accounted for roughly 60% – $17.3 • U.S. affiliate income from China and India in 2019 ($17 trillion – of corporate America's total foreign assets billion) was a fraction of what U.S. affiliates earned in globally. Largest shares: the UK (20%, $5.4 trillion) the Netherlands ($84 billion), Ireland ($63 billion), or and the Netherlands (10%, $3.0 trillion). the UK ($57 billion).

• America’s asset base in Germany ($905 billion in • U.S. affiliate income in China in the first three 2018) was about 30% larger than its asset base in quarters of 2020 ($7.1 billion), however, was more all of South America and almost double its assets in than combined affiliate income in Germany ($2.5 China. billion), Spain ($1.7 billion) and France ($629 million), and income in India ($3.1 billion) was well more than • America’s assets in Ireland ($2.0 trillion in 2018) and that earned in many European countries. Switzerland ($1.0 trillion) were each much larger than those in China ($466 billion). Europe in the U.S.

• Ireland has also become the number one export • Europe accounted for over 60% of global FDI that platform for U.S. affiliates in the entire world. Exports flowed into the U.S. in the first three quarters of from U.S. affiliates based in Ireland reached $351 2020. Annualizing data, U.S. FDI inflows from Europe billion in 2018, about 4.5 times more than U.S. affiliate are estimated to come in at $81 billion in 2020 versus exports from China and about 3.5 times more than $120 billion in 2019. affiliate exports from Mexico.

vi - THE TRANSATLANTIC ECONOMY 2021 • UK firms were the largest source of greenfield • European companies accounted for 74% of total foreign investment projects in 18 U.S. states during foreign FDI in U.S. manufacturing in 2019. The the ten-year period from October 2010-September U.S. chemicals sector was the biggest recipient of 2020. German companies led in 11 states, followed European investment ($592 billion), followed by by Canadian companies in 10 states and Japanese transportation equipment ($271 billion). companies in 7. • Affiliate sales, not trade, are the primary means by • Global FDI flows into the U.S. dropped by almost which European firms deliver goods and services 50% in 2020, due to large declines in investments to U.S. consumers. In 2019 European affiliate sales from German, British and Japanese companies. in the U.S. ($2.8 trillion) were more than triple U.S. Despite the turbulence, the U.S. attracted $134 imports from Europe ($852 billion). By country, billion of inflows, ranking second after China ($163 sales of British firms were the largest ($714 billion) billion). Prior to 2020, the U.S. ranked number one in in 2019, followed by Germany ($555 billion), and the the world for FDI inflows for 14 years. Netherlands ($410 billion),

• European FDI flows into the U.S. fell to $81 billion • Sales by British affiliates in the U.S. totaled $714 in 2020 vs. $120 billion in 2019. Europe accounted billion in 2019, followed by German affiliate sales for roughly 64% of the $4.5 trillion invested in the ($555 billion) and those by Dutch affiliates ($410 United States in 2019 on a historic cost basis. Total billion). European stock in the U.S. of $2.9 trillion was more than three times the level of comparable investment Transatlantic Trade from Asia. • U.S. merchandise exports to the EU (including • The bulk of the capital was sunk by British firms the UK) fell by 13.6% in 2020 to $291 billion. The (with total UK stock amounting to $505 billion), the most resilient export markets included Hungary Netherlands ($487 billion), Germany ($372 billion), (U.S. goods exports up 11% in 2020), Malta (+10%), Switzerland ($301 billion). Lithuania (+9%), the Czech Republic (+7%), Sweden (+7%), Ireland (+6%) and Switzerland (+1%). • In 2018 total assets of European affiliates in the U.S. were an estimated $8.1 trillion. The UK ranked first, • The U.S. annual merchandise trade deficit with the followed by Germany, France, and Switzerland. EU (including the UK) fell slightly in 2020 to $175 billion. The U.S. deficit with China ($310 billion) is • In 2018 European assets accounted for nearly 55% of almost double the U.S. deficit with the EU. total foreign assets in the United States. • The U.S. and the EU are each other's largest export • We estimate income of European affiliates in the U.S. markets. U.S. goods exports to the EU (including in 2020 fell 32% to $91 billion after hitting a near- the UK) in 2020 ($291 billion, down 13%) were more record levels in 2019. than double U.S. goods exports to China ($125 billion). Meanwhile, EU (incl. UK) exports to the U.S. • The output of British firms in the U.S. in 2019 reached represented roughly 22% of the region’s extra-EU $178 billion – roughly a quarter of the total output exports in 2019; EU exports to China represented of European firms in the U.S. The output of German just 11% of the total. firms in the U.S. totaled $135 billion, nearly 19% of the European total. • U.S. merchandise exports to Europe have almost doubled in value from 2000 to 2020. U.S. exports • European companies operating in the U.S. accounted of goods to Europe were up 3% in 2019 but fell 13% for nearly 61% of the roughly $1.1 trillion contributed in 2020. Fifteen U.S. states registered double-digit by all foreign firms to U.S. aggregate production in growth in goods exports to Europe from 2018 to 2019. 2018. European affiliate output ($670 billion) was However, all but two U.S. states (New Hampshire and four times larger than Japanese affiliate output New Jersey) registered negative export growth to ($161 billion), 5.4 times larger than Canadian affiliate Europe in 2020. output ($125 billion) and over 39 times greater than Chinese affiliate output ($16 billion).

vii - THE TRANSATLANTIC ECONOMY 2021 • 48 of the 50 U.S. states export more to Europe than • The UK alone accounted for 28% of all U.S. affiliate to China, in many cases by a wide margin. America’s sales in Europe in 2018 – $267 billion, greater than five Pacific coast states exported about 40% more combined affiliate sales in South and Central America goods to Europe than to China. ($124 billion), Africa ($14 billion), or the Middle East ($22 billion). • In 2019 New York and Maryland exports to Europe were more than nine times those to China; Florida • Europe accounted for roughly 55% of total U.S. almost eight times more; Connecticut and New affiliate services sales globally. Jersey six times more; Georgia, Indiana Kentucky, Nevada and Texas roughly five times more. Arizona, • European affiliate sales of services in the U.S. of $636 Kansas, Massachusetts Virginia, Illinois and Missouri billion in 2018 were about 32% below U.S. affiliate each exported roughly four times more to Europe sales of services in Europe. than to China. • Nonetheless, European companies are the key • Germany was the top European export market for provider of affiliate services in the U.S. Foreign 20 U.S. states and the UK for 14 in 2019. affiliate sales of services in the U.S. totaled $1.2 trillion in 2018; European firms accounted for 54% Transatlantic Services of the total. British affiliates lead in terms of affiliate sales of services ($161 billion), followed closely by • The U.S. and Europe are the two leading services Germany ($151 billion). economies in the world. The U.S. is the largest single country trader in services, while the EU is the • European companies operating in the U.S. generated largest trader in services among all world regions. an estimated $664 billion in services sales in 2019, The U.S. and EU are each other’s most important which is 2.8 times more than European services commercial partners and major growth markets exports to the U.S. of $245 billion. when it comes to services trade and investment. Moreover, deep transatlantic connections in services The Transatlantic Digital Economy industries, provided by mutual investment flows, are the foundation for the global competitiveness of U.S. • The transatlantic theatre is the fulcrum of global and European services companies. digital connectivity. North America and Europe generate about 75% of global digital content. • Four of the top ten export markets for U.S. services are in Europe. Europe accounted for 39% of total U.S. • U.S. and European cities (Frankfurt, London, services exports and for 42% of total U.S. services Amsterdam, Paris, Stockholm, Miami, Marseille, New imports in 2019. York) are the world’s foremost hubs for international communication and data exchange. • U.S. services exports to Europe reached a record $345 billion in 2019. The U.S. had a $100 billion trade • Transatlantic cable connections are the densest and surplus in services with Europe in 2018, compared highest capacity routes, with the highest traffic, with its $223 billion trade deficit in goods with in the world, with an estimated 38% compound Europe. annual growth rate until 2025. Submarine cables in the Atlantic carry 55% more data than transpacific • U.S. imports of services from Europe also hit an all- routes, and 40% more data than between the U.S. time high in 2019 of $245 billion. The UK, Germany, and Latin America. Switzerland, Ireland, France and Italy are top services exporters to the U.S. • The U.S. and Europe are each other's most important commercial partners when it comes to digitally- • Moreover, foreign affiliate sales of services, or the enabled services. The U.S. and the EU are also delivery of transatlantic services by foreign affiliates, the two largest net exporters of digitally-enabled have exploded on both sides of the Atlantic over the services to the world. past few decades and become far more important than exports. • In 2019, digitally-enabled services accounted for 59% of all U.S. services exports, 50% of all services • We estimate that sales of services of U.S. affiliates in imports, and 76% of the U.S. global surplus in trade Europe rose by around 3% to $968 billion in 2019, 2.8 in services. times more than U.S. services exports to Europe of $345 billion.

viii - THE TRANSATLANTIC ECONOMY 2021 • In 2019 the U.S. registered a $219.9 billion trade the delivery of digital services by U.S. and European surplus in digitally-enabled services with the world. foreign affiliates. U.S. services supplied by affiliates Its main commercial partner was Europe, to which abroad were $1.7 trillion, roughly double global U.S. it exported over $245 billion in digitally-enabled services exports of $875 billion. services and from which it imported an estimated $133 billion, generating a trade surplus with Europe • 52% of the $938 billion in services provided in Europe in this area of over $112 billion. by U.S. affiliates in 2018 was digitally-enabled.

• U.S. exports of digitally-enabled services to Europe • In 2018 U.S. affiliates in Europe supplied $490.51 were about 2.7 times greater than U.S. digitally- billion in digitally-enabled services, double U.S. enabled services exports to Latin America, and digitally-enabled exports to Europe. double U.S. digitally-enabled services exports to the entire Asia-Pacific region. • In 2018 European affiliates in the U.S. supplied $273.78 billion in digitally-enabled services, double • The 27 EU member states collectively exported ¤1.1 European digitally-enabled exports to the U.S. trillion in digitally-enabled services to countries both inside and outside the EU in 2019. EU27 imports of • In 2018, Europe accounted for 69% of the $289.6 digitally-enabled services were also ¤1.1 trillion in billion in total global information services supplied 2019. abroad by U.S. multinational corporations through their majority-owned foreign affiliates. • Excluding intra-EU trade, EU member states exported ¤585 billion and imported ¤622 billion in digitally- • U.S. overseas direct investment in the “information” enabled services, resulting in a deficit of ¤37 billion industry in the UK alone was more than double such for these services. investment in the entire Western Hemisphere outside the United States, and 33 times such investment in • Digitally-enabled services represented 55% of all EU China. Equivalent U.S. investment in Germany was services exports to non-EU countries and 63% of all four times more than in China. EU services imports from non-EU countries. Transatlantic Jobs • In 2019 the United States accounted for 22% of the EU27’s digitally-enabled services exports to non-EU • Despite stories about U.S. and European companies countries, and 27% of EU digitally-enabled services decamping for cheap labor markets in Mexico or imports from non-EU countries. Asia, most foreigners working for U.S. companies outside the U.S. are European, and most foreigners • European countries with the largest estimated value working for European companies outside the EU are of digitally-enabled services exports were the UK American. (¤261 billion), Ireland (¤177 billion), Germany (¤173 billion), and the Netherlands (¤160 billion). • European companies in the U.S. employ millions of American workers and are the largest source of • Digitally-enabled services are not just exported onshored jobs in America. Similarly, U.S. companies directly, they are used in manufacturing and to in Europe employ millions of European workers and produce goods and services for export. Over half of are the largest source of onshored jobs in Europe. digitally-enabled services imported by the U.S. from the EU is used to produce U.S. products for export, • U.S. and European foreign affiliates directly employed and vice versa. 9.9 million workers in 2019. These figures understate the overall job numbers, since they do not include • EU27 member states imported ¤1.1 trillion in digitally- jobs supported by transatlantic trade flows; indirect enabled services, according to 2019 data from employment effects of nonequity arrangements such Eurostat. 42% originated from other EU27 member as strategic alliances, joint ventures, and other deals; states. Another 16% (¤167 billion) came from the and indirect employment generated for distributors United States – making it the largest supplier of and suppliers. these services – and 11% came from the UK. • U.S. affiliates directly employed an estimated 4.9 • Even more important than both direct and value- million workers in Europe in 2019 – close to one-third added trade in digitally-enabled services, however, is more than in 2000.

ix - THE TRANSATLANTIC ECONOMY 2021 • Roughly 33% of the 14.4 million people employed by • Texas gained 25,300 jobs (6.7% more) directly from U.S. majority-owned affiliates around the world in European investment between 2017 and 2018. Others 2018 lived in Europe; that share is down from 38% in with significant gains included California – 22,100 2008. jobs added (+4.7%); New York 16,300 (+4.8%); Michigan 15,100 (+8%); Florida 12,600 (+5.8%); and • U.S. affiliates employed more manufacturing workers Virginia 10,500 (+7.4%). in Europe in 2018 (1.9 million) than they did in 1990 (1.6 million), and about the same as in 2000 (1.9 • The top five U.S. states in terms of jobs provided million). Manufacturing employment has declined in directly by European affiliates in 2018 were California some countries but has rebounded in others. (490,700), Texas (401,500), New York (357,400), Illinois (240,300) and Pennsylvania (232,900). • Poland has been a big winner: U.S. affiliate manufacturing employment grew more than 2.5 • American companies reshoring jobs to the U.S. in times between 2000 and 2018, rising from 51,000 to 2020 created more jobs (69,000) than FDI (42,000) over 131,000. for the first time in seven years, due to pandemic- induced disruptions to supply chains, digital • Manufacturing employment among U.S. affiliates innovations, and changes to the U.S. tax code. in the UK has declined from 431,000 in 2000 to 293,000 in 2018 and in France from 249,000 to The Transatlantic Energy Economy 195,000. • Foreign companies have invested roughly $400 • Manufacturing employment among U.S. affiliates in billion into U.S. energy-related industries. In 2018, Germany has remained relatively steady – 362,000 FDI in the U.S. energy economy directly supported jobs in 2018, compared to 388,000 in 2000. 173,500 U.S. jobs, contributed $1.2 billion in R&D and generated $5.7 billion in U.S. exports. • U.S. affiliates employ more Europeans in services than in manufacturing and this trend is likely to • German companies are by far are the leading source continue. Manufacturing accounted for 38% of total of foreign direct investment in the U.S. energy employment by U.S. affiliates in Europe in 2018. economy in recent years, accounting for 16% of U.S. affiliates employed nearly 336,000 European the 830 greenfield investment projects in the U.S. workers in transportation and 283,000 in chemicals. energy sector over the past decade. Other notable Wholesale employment was among the largest European investors include France (9%), the UK sources of services-related employment, which (8%), and Spain (7%). includes employment in such areas as logistics, trade, insurance and other related activities. • Europe and the U.S. made up over 80% of all green bonds and 78% of all sustainable debt issued in • European majority-owned foreign affiliates directly 2020. employed 5 million U.S. workers in 2019. European companies now directly employ more Americans • Monthly liquefied natural gas (LNG) exports from than U.S. companies employ Europeans. the United States to Europe dipped in 2020, but still averaged 65 billion cubic feet for the year, up • In 2018 the top five European employers in the from 57 billion cubic feet in 2019. The U.S. is a net U.S. were firms from the United Kingdom (1.3 energy exporter of crude and petroleum products to million), Germany (860,700), France (780,000), the Europe. Netherlands (550,000), and Switzerland (478,500). • U.S. companies in Europe have become a driving • European firms employed roughly two-thirds of force for Europe’s green revolution. Since 2007 U.S. all U.S. workers on the payrolls of majority-owned companies have been responsible for more than half foreign affiliates in 2018. of the long-term renewable energy agreements in Europe. U.S. companies account for four of the top • European companies directly supported 301,000 five purchasers of solar and wind capacity in Europe. jobs in the U.S. transportation equipment industry in 2018 – 50% of total foreign affiliate employment in this industry.

x - THE TRANSATLANTIC ECONOMY 2021 The Transatlantic Innovation Economy • In the U.S. R&D expenditures by majority-owned foreign affiliates totaled $66.9 billion in 2018. R&D • Bilateral U.S.-EU flows in R&D are the most intense spending by European affiliates totaled $45.1 billion, between any two international partners. In 2018 U.S. representing 67% of all R&D performed by majority- affiliates spent $33 billion on R&D in Europe, 56% of owned foreign affiliates in the U.S. total U.S. R&D conducted globally by affiliates. • The largest European sources of R&D in the U.S. • R&D expenditures by U.S. affiliates were the greatest in 2018 were firms from Germany ($10 billion) and in the UK ($6.7 billion), Germany ($6.3 billion), Switzerland ($9.6 billion). Switzerland ($5.4 billion), Ireland ($3.4 billion), France ($2.1 billion), Belgium ($1.8 billion) and the Netherlands ($1.6 billion). These seven nations accounted for roughly 83% of U.S. spending on R&D in Europe in 2018.

xi - THE TRANSATLANTIC ECONOMY 2021 xii - THE TRANSATLANTIC ECONOMY 2021 1 - Time to Heal: The Transatlantic Partnership in 2021

1 Time to Heal: The Transatlantic Partnership in 2021

New York France

1 - THE TRANSATLANTIC ECONOMY 2021 1 - Time to Heal: The Transatlantic Partnership in 2021

The last four years tested the transatlantic relationship

Escalating trade tensions Deviating approaches to and tariffs the WTO Appellate Body

Expanding restrictions on Disputes over privacy foreign direct investment regulations, industrial subsidies and digital taxes Differing objectives on climate change Divergent positions on Brexit Conflicting views over China, Russia and Iran A once-in-a-century global health crisis Quarreling over defense ¤ spending, military deployments and even the future viability of NATO

As of this writing, the COVID-19 pandemic has taken industrial subsidies, and digital taxes; and divergent more than two and a half million lives worldwide. positions on the United Kingdom’s departure from The United States and the European Union (EU) the EU. The icing on the proverbial cake: a once- have each lost over 500,000 lives. Unprecedented in-a-century global health crisis that brought the scientific collaboration has brought us vaccines, but global economy to its knees, spawning even more it will take a year or more to manufacture and deploy transatlantic discord and division. enough vaccines to stop the pandemic. Even after vaccination becomes routine, it is likely that the virus In the face of these multiple headwinds, the will remain endemic and continue to evolve, requiring transatlantic partnership bent. But it did not break. vaccine adjustments and constant vigilance for years Even as political storms howled, the world’s largest to come.1 and most important bilateral commercial relationship stayed on track. The best metric of this dynamic: At its best, 2021 will be a time to heal. A time to move in 2019, one year before the pandemic rattled the our societies and our economies from sickness to global economy, U.S. foreign income in Europe hit health. A time to repair and recast the transatlantic a record high of $298 billion; meanwhile, European partnership. COVID-19 is an extraordinary test of affiliate income in the U.S. tallied $134 billion in transatlantic and global cooperation. It is also a the same year, the second highest annual total on transformative opportunity for the United States and record. Notwithstanding outsized policy differences, Europe to build international coalitions to end the transatlantic business carried on. Countries traded, pandemic and create new economic pathways out tourists traveled, companies invested, profits were of the recession. earned, capital crossed borders, workers worked, consumers consumed. Bent, But Not Broken Owing to the devastating effects of the pandemic- The last four years subjected the transatlantic induced recession, transatlantic flows of virtually partnership to the ultimate stress test: escalating everything (trade, investment, capital, people) trade tensions and tariffs; expanding restrictions on dropped dramatically over the past twelve months. foreign direct investment (FDI); differing objectives But the declines are one-off, an anomaly against on climate change; conflicting views over China, a backdrop of steadily rising and solidifying Russia and Iran; quarreling over defense spending, transatlantic commercial ties. As we shift to the post- military deployments and even the future viability of pandemic world, and as the transatlantic economy North Atlantic Treaty Organization (NATO); deviating heals this year, we expect the bilateral flows that approaches to the World Trade Organization (WTO) shape the transatlantic partnership to rebound as Appellate Body; disputes over privacy regulations, well.

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The global pandemic strongly impacted transatlantic flows, but declines are expected to be one-off.

The Transatlantic Economic Outlook: grounded. Businesses were shuttered. The majority Moving From Sickness to Health of the work force went remote. Quarantines became the norm. Students left universities for home. Stay- The COVID-19 pandemic will go down in history at-home orders multiplied; recreational venues were as one of the most significant global events of the closed and events canceled. Never had the world modern era. It has ravaged societies and economies experienced such a sudden hard stop. with unprecedented ferocity and scale. It blindsided public authorities who threw together ad hoc, As the International Monetary Fund (IMF) noted in its uncoordinated measures ranging from cross-border annual economic outlook, “this crisis is like no other.” travel bans to social distancing recommendations. The Great Lockdown brought the $90 trillion global As the pandemic swept the world in early 2020, economy to a near halt in the second quarter of 2020. curfews were put in place. Schools were closed. Seasonally adjusted, in that period, EU real GDP Airports became desolate canyons. Planes were dropped by a staggering 38% and U.S. output by 31%.

Table 1 COVID-19 Economic Downturn in the U.S. and in European Countries (Real GDP level, Q1 2004 = 100)

140

130 U.S. Germany UK 120 France Eurozone 110 Spain

100 Italy 90

80 Greece 70

60 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Source: Haver Analytics. Greece data through Q3 2020. All other data through Q4 2020.

The Great Lockdown: impact on output

-38% -31%

EU U.S. 2Q 2020 GDP Decline (Seasonally Adjusted Annualized Rate)

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The health crisis quickly morphed into an economic 203,000 and 239,000, respectively.2 On the latter crisis for a number of reasons. Containing the score, however, policy makers have fared much better. virus necessitated quarantines, lockdowns, social Indeed, on both sides of the Atlantic, policymakers distancing, and stay-at-home orders – all leading to have been extraordinarily aggressive in leveraging less work, less income, less spending and less mobility. monetary and fiscal tools to combat the transatlantic Human interaction fuels economic activity, so when recession, producing more a V-shaped recovery than everyday activities of workers and consumers come to the U-shaped rebound many forecasted. a halt, so do economies. Those sectors dependent on mobility – travel, hospitality, sports, entertainment and In the United States, the combined fiscal and monetary tourism – were hammered, even as many technology response – some $10 trillion by the end of 2020 – sectors profited. As factories closed, supply chain represents an unprecedented 48% of GDP. The Biden disruptions rippled across the world, exposing the administration's $1.9 trillion relief package of March fragile interconnectedness of global manufacturing 2021 will further jolt the economy. In Europe, policy networks. Consumers curtailed spending, with many makers have also stepped up in a big way. Eurozone opting to shop online rather than in person. This and UK governments introduced about $7.8 trillion triggered a wave of business closures and layoffs, in fiscal stimulus and central bank liquidity injections fueling more downside pressure on economic growth. from February to December 2020.3 And as one country after another plunged into recession, global trade volumes collapsed, putting Owing in large part to the massive policy response, even more downside pressure on the global economy. the transatlantic economy is on the mend, but the According to the WTO, the volume of global goods rebound is not synchronized. It is uneven. The U.S. trade dropped 2% in the first quarter of 2020 and by economy is leading, while Europe not only lags, it 13% in the second quarter. lags by a great deal. After engineering a rebound in economic growth in the third quarter of 2020, As we wrote in last year’s survey, “the extent and Europe’s output contracted in the final quarter of nature of a COVID-19-induced transatlantic recession the year, causing the continent to limp into 2021. will depend on how quickly the virus can be brought Following an estimated decline in real GDP of 6.6% under control, and the extent to which governments in 2020 – one of the steepest drops in output in the are prepared to help economies weather the storm.” post-World War II era – the eurozone is expected to expand by 4.2% this year, assuming the pandemic is On the former score – controlling the virus – controlled and the continent is successful in rolling governments have largely failed: at the beginning of out vaccinations over the balance of the year. That April 2020, the number of daily new COVID-19 cases said, the economic impact of the pandemic remains reported was roughly 30,000 in the United States and uneven across many countries and the speed of the 36,000 in Europe. By the end of 2020, the figures were recovery is also projected to vary significantly.4

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Table 2 U.S. vs. Euro Area Real GDP, Annual Percent Change

6 5 4 3 2 1 0 -1 -2 -3 -4 -5 -6 -7 -8 -9 -10 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020* 2021* n U.S. n Euro Area *2020 estimate, 2021 forecast. Data as of March 2021. Sources: International Monetary Fund; U.S. Bureau of Economic Analysis; Eurostat.

The U.S. economy declined by 3.5% in 2020, but The sooner vaccines can be distributed and steadily gained momentum in the second half of administered across the United States and Europe, the year, and is expected to expand by 5.1% this the sooner the transatlantic economy can heal. In the year, according to estimates from the IMF. The U.S. near-term, COVID-19 concerns will temper consumer economy will again outperform Europe this year, but spending on both sides of the Atlantic, although there are plenty of soft spots in the United States, a second-half rebound in transatlantic spending ranging from weak retail demand to a battered travel is widely expected. This is key to the transatlantic and leisure industry. Meanwhile, while manufacturing outlook, notably for European companies. At $14 activity has rebounded, services activities remain trillion, U.S. personal consumption remains one of the weak, creating winners and losers across the most potent economic forces in the world, accounting economy. The stock market has propelled average for nearly 30% of global personal consumption in 2019 household net worth to record highs in the United – greater than that of the next five largest consuming States, although nearly two-thirds of Americans live markets in the world: China, Japan, Germany, the UK, paycheck to paycheck. Unemployment levels have and India. Since the U.S. consumer accounts for 70% come down somewhat from last summer’s highs, but of U.S. GDP, as goes the U.S. consumer, so goes the the level of unemployment remains elevated among U.S. economy – and so go the earnings of those many U.S. retail workers, women and Black Americans. European firms that sell more goods and services in All of the above is another way of saying that the the United States than in their home markets. Strong U.S. economy, while exhibiting signs of resiliency, U.S. consumer spending positively spills over to confronts plenty of cyclical and structural challenges, Europe via rising sales of European affiliates in the in addition to the herculean task of distributing United States and higher European exports. vaccines to hundreds of millions of Americans.

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Global personal consumption (2019) United States and 50% European Union (+UK)

China and 15% India

Combined, U.S. and European consumers accounted trade deficit with the EU (roughly $175 billion in 2020, for half of world consumption in 2019, a fact that including the UK). However, overall U.S.-European underscores the attractiveness of the transatlantic commercial interactions are far more balanced if one economy and reinforces a point we have made many includes services and digital economy considerations, times: despite all the talk around the rise of China, the as we explain in Chapters Two and Four. In addition, United States and the EU still command the largest as transatlantic economic activity revives this year, share of global consumption (50% combined in 2019 bilateral trade flows will rebound as well, although including the UK versus only 15% of China and India America’s outsized trade deficit with the EU will combined). At the end of the day, consumers in the remain an irritant to Washington. United States and Europe are far wealthier (on a per capita basis) than their counterparts in China and We also expect the transatlantic employment picture India. As the pandemic passes, as vaccinations reach to improve gradually this year, following historic massive scale on both sides of the Atlantic, consumer declines in 2020. Jobs markets in both the United spending will come back with a vengeance. States and Europe are slowly set to improve. A normalized transatlantic jobs market is not expected More spending means more transatlantic trade in until the vaccine has been widely distributed on both 2021, following a dramatic drop in trade in 2020. sides of the ocean and services activities rebound U.S. goods exports to the EU in 2020 (including the from the depths of recession. Entering this year, the UK) plunged by over 13%, while imports from the EU jobless rate in the United States stood at 6.3% in fell 10%. The upshot: a still sizable U.S. merchandise January 2021, down from its peak of 14.8% in April

Table 3 U.S. Merchandise Trade Balance with the EU (including the UK) (Billions of $)

0 0

-20-20

-40-40

-60-60

-80-80

-100-100

-120-120

-140-140

-160-160

-180-180

-200-200 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20

Source: United States Census Bureau. Data as of February 2021

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Transatlantic unemployment rate

6.3% 7.3% U.S. EU27 (January 2021) (January 2021)

Table 4 U.S. vs. EU Unemployment Rate Harmonized Unemployment Rate, Monthly %

16

14

12

10

88 EU27

66 U.S.

44

22 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Source: OECD. Data through January 2021. EU excludes the UK.

2020, but up from a cyclical low of 3.5% in February begins, however, with the U.S. and EU economies 2020. The jobless rate of the EU27 was 7.3% in on divergent growth paths, which could generate January 2021, but this figure masks widely divergent additional obstacles to transatlantic cooperation. rates across the continent. In January, the jobless Meanwhile, while U.S.-EU relations are poised to heal, rate was 16% in Spain, versus an unemployment rate the feel-good moment could fade if both parties of just 4.6% in Germany, 3.6% in the Netherlands, and fail to find common ground on dealing with China, 3.1% in Poland. Structural unemployment among EU Russia, Iran, data privacy, trade, and a host of other youth remains a critical challenge, just as women sticky and divisive issues. and minority unemployment rates remain well above the national average in the United States. The key New U.S.-EU Possibilities point is this: employment prospects will improve this year due to the massive fiscal and monetary stimulus U.S.-European political relations are also poised to on both sides of the pond. However, structural recover after four years of tumult, uncertainty, and unemployment will remain a key policy challenge antagonism. Joe Biden has underscored that Europe again this year for all parties. “remains America’s indispensable partner of first resort” and “the cornerstone of our engagement The bottom line: the transatlantic economy, led with the world.” These sentiments, which have by the United States, is on the mend but many been echoed by European leaders, offer a rare and cyclical and structural challenges remain. The year potentially fleeting opportunity to reinvigorate and

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recast the transatlantic partnership to address the In the current climate, the two parties might consider unparalleled damage wrought by the coronavirus, improving their regulatory cooperation. Sectors fissures that have opened up within and between our that show promise for U.S.- EU agreement include: societies, daunting climate and energy challenges, automotive safety regulations; unique identification the promise and the perils of swift and often of medical devices; fiber names and labelling, safety disruptive technological innovation, and revisionist requirements, and conformity assessment procedures assaults on our principles and our institutions. in the textiles sector; cosmetics; pesticides; chemicals; information and communications technology; The key to a more effective relationship is to engineering; and technical barriers to trade. The recognize that the United States and Europe are U.S.-EU High Level Regulatory Cooperation Forum more than foreign policy partners. U.S. relations with (HLRCF), established in 2005, could be revived to the EU, its member states, and non-EU European allow regulators to oversee such cooperation. They allies and partners comprise some of the most should consider forging a Standards Bridge that complex and multi-layered economic, diplomatic, could help small- and medium-sized enterprises, and societal and security connections that either to find ways to align positions within international partner has on the planet. In a world of deepening standard setting bodies. global connections, the transatlantic relationship remains the thickest weave in the web. Networks of The parties should separate regulatory cooperation interdependence across the Atlantic have become from bilateral market access negotiations. Once so dense that they transcend “foreign” relations progress is made on economic recovery and and reach deeply into our societies. Far-reaching clearing away bilateral irritants, the parties should opportunities for transatlantic cooperation extend seek a transatlantic zero tariff agreement that to interrelated issues of health, resilience, climate would eliminate all duties on traded goods and and energy, digital transformation, scientific and services. That effort should exclude sanitary and technological innovation, better jobs and sustainable phytosanitary (SPS) measures and investor-state growth. Almost all are rooted in the dense ties that dispute settlement (ISDS) provisions. bind the transatlantic economy. Third, they should intensify North Atlantic Economics and Trade cooperation in research, development and innovation. Transatlantic partnership in these areas is essential The economic damage wrought by COVID-19, to the future development of such leading-edge together with the ongoing climate and energy sectors as AI, biotechnology, and clean energy. transitions, and the challenges posed by China’s rise, compel the United States and Europe to focus Fourth, the parties should work together to reform transatlantic economic cooperation squarely on the WTO, by restoring dispute settlement by creating jobs, boosting sustainable growth, and reforming the Appellate Body, intensifying U.S.-EU- protecting our values by ensuring that North Atlantic Japan work on level playing field issues like subsidies countries are rule-makers rather than rule-takers. and disciplines on state-owned enterprises, and advancing WTO negotiations on e-commerce, as Given current economic uncertainties and lingering well as the Trade in Health and Trade and Climate tensions over tariffs and digital issues, there is initiatives. The EU’s new Trade Policy Review points understandable temptation to keep transatlantic to a convergence of views across the Atlantic around trade negotiations in the deep freeze. Yet if the both the problems and potential solutions at the United States and the EU prove unable to resolve WTO. bilateral frictions and better the terms of their own extensive commercial relationship, it will be difficult The two parties would do well to consider the EU’s to find common ground on other issues. Unresolved offer of an EU-U.S. Trade and Technology Council. issues are more likely to fester than remain frozen. Such a Council could be useful if it brings strategic Washington and Brussels will be distracted and thinking back into the economic relationship. This diminished by their trade squabbles as China rises. was the original vision for the Transatlantic Economic The WTO could be at risk. Economic anxieties Council (TEC), the cabinet-level body formed in and political prejudices will be exacerbated. The 2007. A reinvigorated Council should include the result would be the triumph of lowest-common- economic policy principals on both sides, chaired at denominator standards for the health, safety and the Vice President level, with only strategic issues on welfare of Americans and Europeans alike. Standing its agenda. still means losing ground.

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Climate and Energy A Digital Agenda

U.S.-EU cooperation will be fundamental to ensuring The EU has offered to develop with the United States the success of the climate and energy transitions a “transatlantic technology space” that “should form underway. Because these transformations are so the backbone of a wider coalition of like-minded fundamental to each of our societies, they must be democracies with a shared vision on tech governance grounded in extensive stakeholder engagement on and a shared commitment to defend it.”6 Prospects each side of the Atlantic. Initiatives must go beyond for such an initiative must be assessed against a formal U.S.-EU channels and individual national series of digital disconnects that have roiled U.S.-EU government actions to engage regional, state and relations in recent years. These include differences local actors, NGOs, and the private sector. Ultimately, over privacy rules, taxes, antitrust laws, efforts businesses will be charged with making the to address dis- and misinformation, contrasting investments, creating the markets and implementing approaches to 5G security, and the EU’s ambition the technologies needed to transform the energy to strengthen its “technological sovereignty,” which sector. As we show in Chapter Five, U.S. and aims in part to reduce European dependence on European firms are deeply embedded in each other’s U.S.-based companies. In addition, the European traditional and renewable energy markets – through Commission has advanced major initiatives through trade, foreign investment, cross-border financing, its Digital Services Act and Digital Markets Act and collaboration in research and development. that could create additional complications for U.S. investors and the new U.S. administration alike. The two parties might consider reenergizing and revamping the U.S.-EU Energy Council as a U.S.- The two parties will need to resolve disputes EU Climate and Energy Council. This Council would surrounding taxation of digital services, potentially serve as an overarching platform for transatlantic via ongoing negotiations at the OECD. They also climate and energy work, including on such priorities need to address the July 2020 ruling of the Court as forging pathways to global net zero emissions, of Justice of the European Union (CJEU) invalidating improving energy efficiency and security, advancing the U.S.-EU Privacy Shield framework that regulated renewable energy deployment, reducing methane some transatlantic flows of personal data for emissions, designing sustainable finance and climate commercial purposes. The European Commission risk mechanisms, mobilizing resources for climate and the U.S. Department of Commerce are in the action in the developing world, and working on clean midst of renegotiating the Privacy Shield. Over the and circular technologies, such as renewables, grid- long term, however, an international agreement scale energy storage, batteries, clean hydrogen, and governing the rights of governments to access carbon capture, storage and utilization. privately held commercial data for law enforcement purposes will be needed. The most immediate challenge will be U.S.- EU consultations on carbon border adjustment Despite these irritants, there are sufficient mechanisms (CBAMs)5 – taxes on imported goods complementarities in U.S. and EU approaches based on their attributed carbon emissions – given to warrant intensified efforts towards a more that the European Commission plans to unveil its forward-looking approach to digital issues. These own CBAM proposal by summer 2021. Because the could include taking up the EU’s offer to intensify EU and the United States are each other’s largest cooperation on digital supply chain security, and commercial partners, driven by significant mutual to work on a transatlantic AI agreement to set a investments forming dense interlinkages across both blueprint for regional and global standards aligned economies, it will be important for the parties to work with our values that can facilitate free data flow with together to devise WTO-compatible CBAMs. Failure trust. The two parties might consider an EU-U.S. to do so could lead to additional trade tensions at a Dialogue on Data Governance to address differences time when neither economy can afford them. over data governance and flows; platform regulation and antitrust law; online content and the protection of democracy against dis- and misinformation; and governance of the future Internet. Not working together on these issues leaves the field open for non- democratic actors to set global standards instead.

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Bilateral irritants, regulatory cooperation and standards Elimination of tariffs Research, development and Climate and innovation in cutting-edge Energy Council sectors Cooperate on WTO reform mechanisms Trade and Technology Council to limit carbon emissions

Economics and trade Climate Opportunities and energy for U.S.-EU cooperation

Digital

Renegotiation of the Privacy Shield Digital supply chain security Transatlantic standard setting on AI EU-U.S. dialogue on data governance

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Box 1.1 No Exit From Brexit

The United Kingdom left the European Union formally on January 31, 2020, but after an 11-month transition period the new UK-EU relationship truly began on January 1, 2021. Brexit is a defining moment for Britain’s relations with the rest of Europe, even perhaps for its future as a united kingdom of England, Wales, Scotland, and Northern Ireland. It will affect its strategic partnership with the United States and many countries around the globe. It is also significant for the EU. Just to take one example, having lost the UK, EU capital markets have now shrunk from just over a fifth of global activity to just 13%, the same size as China.

On Christmas Eve, 2020, the UK and the EU concluded a Trade and Cooperation Agreement (TCA) regulating their future trading relationship. The deal provides tariff- and quota-free trade in goods between the two sides, which is more than the EU has offered any other advanced economy. The price was UK agreement not to undercut EU labor and environment standards and a commitment not to provide excessive subsidies to the private sector.

Although tariff-free, goods trade now faces a hard customs and regulatory border between the EU and the UK. UK and EU firms cannot assume that they can sell their goods in the other’s market simply because those products have been approved by their own respective regulators. Extra red tape could cost British businesses around $23 billion a year and EU-based businesses about $19 billion, according to estimates from law firm Clifford Chance.7 Notably, the tensions at the border are likely to get worse before they get better: initial UK grace periods for customs and sanitary checks on imports will end in the coming months, subjecting even more trade to potential delays.

The deal treats Northern Ireland, which is part of the UK, as within the EU customs area to prevent the need for a hard border on the island of Ireland, but requires checks on goods going from Britain to Northern Ireland, essentially creating a customs border in the middle of the Irish Sea.

Fisheries negotiations were contentious. The deal creates a five-and-a-half-year transition period during which EU fishing rights in UK waters ($730 million per year) will be reduced by one quarter, with British quotas increased by a corresponding amount. After the transition, access will depend on annual negotiations, such as those the EU already has with Norway.

In February 2021 the European Commission made a provisional determination – still requiring approval by EU data protection authorities and member states – that the UK appeared to offer “essentially equivalent” data protection standards to the EU. The Commission signaled, however, that it would impose “clear and strict” checks on the UK’s handling of personal data, and would review the decision every four years. The ruling could be annulled should London be deemed to have departed from EU privacy standards. It could also prove vulnerable to legal challenges at the European Court of Justice.8

The movement of people has been constrained. Britons and EU citizens no longer have the right to go to the other’s territory to work and live there on the same basis as the country’s own citizens. Piecemeal visa-waiver arrangements and national right-to-work rules are now in force. UK professional services providers, such as doctors, engineers and architects, have lost their ability to automatically work in the EU; they must have their qualifications recognized in each EU member state where they want to work.9

Significantly, the TCA does not include meaningful provisions for trade in services, which make up some 80% of the British economy. The UK has granted temporary permission to EU firms offering a range of financial services to UK clients, but the EU has done the same only for clearing and settlement of some financial assets through UK exchanges, because a sudden loss of access would threaten the stability of the financial system. London handles about 90% of all deals in clearing

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houses, which prevent defaults from igniting chain reactions across markets. The EU has made clear, however, that it expects banks to move their euro-denominated trades into the bloc by mid-2022.10

Beyond these specific arrangements, the City of London and UK-based financial institutions have lost automatic access to the EU’s single market, even though the UK has agreed to recognize EU- based financial institutions operating in the UK.11 Major UK institutions have sought work-arounds by establishing EU-domiciled subsidiaries, but UK-EU financial flows are significantly less seamless than before.

The impact has already been dramatic. In January 2021, ¤6.5 billion in deals shifted immediately from the UK to the EU. Amsterdam surpassed London as Europe’s largest share trading center as it recorded a fourfold increase in average traded shares per day, rising to ¤9.2 billion, and London lost half of its daily average value of traded shares, down to ¤8.6 billion. Amsterdam has also picked up activity in swaps and sovereign debt markets that typically used to take place in London. Even before January 2021, EY estimated banks had shifted ¤1.6 trillion in assets and sovereign debt trading to cities such as Frankfurt, Amsterdam, and Milan that would typically have taken place on venues in London. More than £4 billion, or $5.3 billion, of insurance premium income in 2019 that would typically be handled in London was written in new hubs such as Brussels.12

As of this writing, the two parties are discussing a memorandum of understanding on financial services that potentially could include mutual recognition of each other's rules as “equivalent,” which would allow the financial industry to trade across the UK-EU border. There are no guarantees, however, and the stakes are high: Britain sells roughly £30 billion, or $40 billion, of financial services to the EU each year. It ran a surplus of £18 billion, or $24 billion, on trade in financial and other services with the EU in 2019, but a deficit of £97 billion, or $129 billion, on trade in goods.13

EY further estimates that about 10,000 City jobs – 4% of the total – have either been shifted to various EU cities such as Dublin, Luxembourg, Frankfurt, Paris and Amsterdam, or been displaced by firms choosing to add new roles there rather than London. Still, while some jobs have left, others have moved in. Bovill, a regulatory consultancy, found that more than 1,400 EU-based companies have applied for permission to operate in the UK after Brexit.14

Despite these hiccups, financial services remain one of the UK’s key industries, and London remains Europe’s main financial center and a dominant force in global finance. The City accounts for 43% of the turnover in the $6.6 trillion-a-day foreign exchange market and half of the daily $6.5 trillion traded in interest rate derivatives. Portfolio managers in London oversee about £8.5 trillion, or $11.3 trillion, in assets for savers in funds and mandates, making the UK the primary investment management center in Europe and the second-largest globally after the United States.

Nonetheless, Brexit’s difficulties have exacerbated the pandemic-induced challenges facing companies on both sides of the English Channel, as real EU GDP dropped by 6.2%, and the UK’s headline GDP fell by 9.9%, in 2020. The immediate cost to the UK of lost access to the EU has been estimated at about 1% of national income.15 Over 15 years, Brexit will leave Britain facing a further 4% loss of potential gross domestic product compared to an alternative baseline of remaining an EU member, according to the UK’s Office for Budget Responsibility.16 Moreover, since so little was determined by the time the UK left the EU, the two parties are certain to be engaged in continuous negotiations, much like the EU and Switzerland have done for decades. However those talks may evolve, there will be no exit from Brexit. Denis MacShane, a former UK minister for Europe, calls it “Brexiternity.”17

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Box 1.2 Boeing vs. Airbus is not America vs. Europe

In March 2021 the United States, the EU and the UK began to turn a first page in their efforts to repair relations by suspending for four months tariffs the U.S. and the European partners had imposed on each other related to their sixteen-year dispute over government subsidies to Boeing Co. and Airbus SE. The tariff war was jeopardizing thousands of jobs on both sides of the Atlantic at a time when the pandemic is wreaking havoc on the airline industry. Dueling tariffs on additional industries were penalizing communities that have little to do with aerospace. It was distracting Washington and European capitals from China’s far larger subsidy challenge. If the parties are serious about fully turning the page, they will use the tariff cease-fire to settle the Boeing-Airbus dispute once and for all.

This transatlantic tiff centers on the WTO's determination that the U.S., the EU, and the UK all violated their trade commitments by subsidizing their domestic aerospace industries. Germany, France, Spain, and the UK provided Airbus with financial subsidies for aircraft development. Boeing profited from tax breaks offered by the U.S. state of Washington. The WTO has authorized the U.S. to retaliate by levying tariffs on up to $7.5 billion annually on EU goods imports, and has authorized the EU to charge duties of up to $4 billion annually on U.S. goods imports. Each has imposed tariffs on aircraft as well as on a range of unrelated agricultural and industrial products. Those tariffs remain in place until a settlement is reached.

This transatlantic row is curious in a number of ways. The first is that Airbus vs. Boeing has long become synonymous with Europe vs. America, when in fact the two aerospace industries are deeply intertwined with each other, and each is a major investor and job-supplier on the other side of the Atlantic.

Boeing directly employs thousands of Europeans across countries, just as Airbus employs thousands of Americans in 38 locations in 16 U.S. states. You will find European components on every Boeing aircraft. U.S.-based suppliers and producers account for 40% of the components that make up an average Airbus jet. Over the past three years, Boeing has spent over $28 billon on its European supply chain and Airbus has spent $50 billion on its U.S. supply chain.

Maintaining these jobs and investments at a time of pandemic-induced recession and massive challenges to the aviation industry is of common interest – and yet instead of seeking solutions, both sides had expanded their target lists to inflict collateral damage on unrelated industries and agricultural producers in each economy.

The negative ripple effects of these actions are evident when one considers that the Airbus plant in Mobile, Alabama supplies aircraft to major U.S. carriers such as Delta, JetBlue, and Spirit. Since various components for those U.S.-built planes – fuselage sections, wing and wing assemblies – come from other Airbus facilities in Europe, U.S. tariffs actually penalize these U.S. airlines, who pass those costs on to U.S. consumers through increased fares.

The second curiosity is that both sides have already changed their procedures so that both are close to WTO compliance. Washington state withdrew the tax advantages it had offered to Boeing. Airbus has modified the terms on two of eight instances of illegal launch aid it had received from various governments. Now that it has identified a solution, it should not be difficult to finalize new arrangements for the remaining cases. Instead of moving on, however, both sides are relitigating their treatment of past subsidies. The only winners here are the lawyers.

A third curiosity is that the United States and Europe are investing inordinate energy squabbling over subsidies and penalizing each other’s cheese, wine, and whiskey industries at a time when both face a far more significant subsidy challenge from China.

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According to estimates, Beijing has subsidized the Commercial Aircraft Corporation of China, known as COMAC, with up to $72.1 billion – far more than the estimated $22 billion in European subsidies for Airbus and the estimated $23 billion in U.S. subsidies for Boeing. What’s more, Chinese subsidies for COMAC are continuing, even as the U.S. and the EU have wound down subsidies for their own domestic industries.

Washington and Brussels have been quick to cry foul. Their credibility is questionable, however, when together they have been identified as subsidizers-in-chief. Until they resolve their own dispute, they are unlikely to have much leverage with Beijing.

The Boeing-Airbus dispute is a squabble we literally cannot afford. Our aerospace industries are deeply entwined with each other and with broad sectors of our respective economies. We have a mutual interest in turning the page on the U.S.-European relationship and eliminating the economic drag these transatlantic tariffs have caused. We cannot effectively challenge China’s use of industrial subsidies until we resolve our own industrial subsidy dispute. Resolving Boeing-Airbus quickly, in a way that leverages our mutual strengths, would truly be an artful deal.

Endnotes

1 For more, see Gigi Kwik Gronvall, “Improving U.S.-EU Effectiveness in Health and Health Security,” Woodrow Wilson Center, February 4, 2021, https://www. wilsoncenter.org/article/improving-us-eu-effectiveness-health-and-health-security. 2 Johns Hopkins University, Bloomberg. Data represents first half of April 2020 versus second half of December 2020. 3 Cornerstone Macro Research, as of December 2020. 4 2020 Estimates are preliminary estimates from Eurostat as of February 2, 2021. Forecasts for 2021 are from the International Monetary Fund January 2021 World Economic Outlook Update. 5 In essence, this mechanism would place a carbon price on imports of certain goods from outside the EU to encourage countries to raise their climate ambition and reduce the risks of companies transferring production to places with less stringent emission rules (carbon leakage). 6 See https://ec.europa.eu/info/sites/info/files/joint-communication-eu-us-agenda_en.pdf. 7 Cited in Alastair MacDonald, “Businesses Brace for Disruption Despite Post-Brexit Trade Deal,” Wall Street Journal, December 25, 2020. 8 Michael Peel, Javier Esinoza and George Parker, “EU warns it will do regular checks on UK data handling,” Financial Times, February 19, 2021. 9 Sam Fleming and Jim Brunsden, “How UK-EU trade deal would change relations between Britain and Brussels,” Financial Times, December 24, 2020. 10 Philip Stafford, “Future of the City: London’s markets rivalry with EU intensifies,”Financial Times, December 16, 2020; Panagiotis Asimakopoulos, “What do EU capital markets look like on the other side of Brexit? New Financial, September 2019, https://newfinancial.org/report-what-do-eu-capital-markets-look-like-on- the-other-side-of-brexit/; Simon Clark, “What Does the Brexit Deal Mean for Financial Services?” Wall Street Journal, December 24, 2020; Philip Stafford, “Friction hampers EU drive to switch clearing from the UK,” Financial Times, November 30, 2020. 11 Anna Isaac and Max Colchester, “City of London Braces for a Post-Brexit Squeeze,” Wall Street Journal, January 21, 2021. 12 Philip Stafford, “Amsterdam ousts London as Europe’s top share trading hub,” Financial Times, February 10, 2021; Philip Stafford, “EU share trading flees London on first day after full Brexit,”Financial Times, January 4, 2021. 13 Philip Stafford, Camilla Hodgson and Chris Giles, “London unlikely to regain lost EU share trading, warn City figures,”Financial Times, January 6, 2021; House of Commons Library, “Statistics on UK-EU Trade,” November 30, 2020, https://commonslibrary.parliament.uk/research-briefings/cbp-7851/; Stafford, “Amsterdam,” op. cit. 14 Siobhan Riding, “Fund managers alarmed over EU push to lure London jobs,” Financial Times, September 20, 2020; Clark, op. cit.; Jonathan Ford, “Future of the City: how London’s reach will shrink after Brexit,” Financial Times, December 9, 2020 15 “FT View: The deal is done. Now Britain needs a post-Brexit vision,” Financial Times, December 24, 2020. 16 “Economic and fiscal outlook,” Office for Budget Responsibility, November 2020, http://cdn.obr.uk/CCS1020397650-001_OBR-November2020-EFO-v2- Web-17 17 Denis MacShane, Brexiternity: The Uncertain Fate of Britain (London: Bloomsbury, 2019).

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2 Jobs, Trade and Investment: Enduring Ties that Bind

Indiana Czech Republic

Poland

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Jobs Investment Technology Innovation

Energy Trade

The collapse in trade, investment, and jobs due to the Yet even with the hit from the coronavirus and much coronavirus has been widespread, hitting all regions talk of de-globalization, the United States and Europe and many industries. As economies shut down, remain deeply intertwined and embedded in each demand plunged, labor markets weakened, and the other’s markets. Consumers and producers, workers cross-border flows of goods, services, people, and and companies, citizens, and their governments on investment collapsed. Even before the pandemic, both sides of the Atlantic directly benefit from the however, global trade growth was decelerating. deep integrative forces that bind the United States Foreign investment was also contracting on account and Europe together. of a global slowdown in economic activity, escalating trade tensions, rising protectionism, and recent U.S. Indeed, despite the 2020 slowdown, the transatlantic tax changes that incentivized American firms to economy remains the fulcrum of the global economy. repatriate foreign profits. The combined output of the United States and the EU27 plus close partners Switzerland, the UK, After bottoming out in May and June 2020, Iceland, and Norway accounted for roughly one-third transatlantic trade in goods quickly rebounded of world GDP in terms of purchasing power parity and is now close to pre-pandemic levels. Services in 2020 – higher than the combined output of the trade, an increasingly important avenue for global newly formed Regional Comprehensive Economic commerce and for transatlantic commercial ties in Partnership (RCEP) in Asia (30% of world GDP). particular, will take much longer to recover, and will depend on progress in vaccine distribution and the The transatlantic economy is not only larger than lifting of travel restrictions. China and India in terms of GDP, it is significantly wealthier. Consumers in the United States and the EU The economic damage from COVID-19 extends far easily outspend their counterparts in China and India. beyond trade. Foreign affiliate sales, not trade, are As mentioned in Chapter One, together the United Europe to the U.S. the primary means by which U.S. and European firms States and the EU (including the UK) accounted for (2018 ) deliver goods and services to foreign consumers. 50% of global personal consumption in 2019, versus Multinational sales and investments, which have a combined share of just 15% for China and India. Per become essential to U.S. and European jobs and capita incomes – a key metric of a nation’s wealth prosperity, witnessed a sharp decline in 2020 due to – are far higher in the United States ($65,300), the collapsing profits, heightened business uncertainty EU27 ($35,000) and the UK ($42,300) than either and an overall weakening of global demand. China ($10,300) or India ($2,100). According to the United Nations, global FDI flows were down 42% in 2020, with severe declines in Europe and North America driving the downturn. Drivers of a strong U.S. economic recovery in 2021 and beyond Economic damage from COVID-19

Trade in goods: quickly Foreign affiliate sales: rebounded after a sharp collapsing profits decline ? Heightened business Trade in services: uncertainty big fall and long road to recovery Weakening of global demand

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Table 1 The Transatlantic Economy vs. The World (Share of World Total)

% 8080

69.2% 70 63.8% 60.5% 6060 54.9%

5050

4040 34.5% 32.2% 3030 27.0%

2020

1010

0 World GDP1 World Exports2 World Imports2 World FDI World FDI World M&A World M&A Inward Stock Outward Stock Sales Purchases Sources: UN, IMF, figures for 2019. Transatlantic economy measured as U.S., EU, UK., Norway, Switzerland and Iceland. 1. Based on PPP estimates. 2. Excluding intra-EU, UK, Norway, Switzerland and Iceland trade.

In addition, the transatlantic economy is a repository as the top commercial artery in the world on account of innovation and technological advancement, and of the thick investment ties between the two parties. at the forefront of global foreign direct investment (FDI) and global mergers and acquisitions (M&A) That said, the burgeoning middle class of the activity. Taken together, U.S. and European exports developing nations represents a new source of to the world (excluding intra-EU trade) accounted supply (labor) and demand (consumers) for U.S. for 27% of global exports in 2019, the last year of and European firms. American and European firms complete data; combined imports represented 32% are building out their presence in the developing of the world total. Meanwhile, the United States and nations, and for good reason. Economic growth Europe together accounted for 61% of inward FDI rates are still above the global average in most of stock and 64% of outward FDI stock. Each partner these nations, populated with young consumers who has built up the great majority of that stock in the desire Western goods and services. In addition, the other economy. technological skill levels of many developing nations are now on par with many developed nations. China, It is no surprise, therefore, that the largest for instance, is rapidly emerging as an innovation commercial relationship in the world stretches across superpower. India lags behind but is advancing. More the Atlantic. Total transatlantic foreign affiliate sales people in Latin America, Africa and the Middle East were estimated at $6.2 trillion in 2019, easily ranking are online and connecting to the digital economy.

U.S. and 34.5% Europe

Regional Comprehensive World 30% GDP Economic Partnership (RCEP)

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Table 2 America’s Major Commercial Arteries

7 $6.2 Trillion

6

5

4 $3.3 Trillion

3 U.S. $ Trillions U.S. $1.9 Trillion 2 $1.6 Trillion $1.4 Trillion $1.4 Trillion $1.2 Trillion $1.1 Trillion 1

0 Transatlantic Asia/Pacific Asia/Pacific Transatlantic Mexico and Mexico and South/Central South/Central Total Foreign Total Foreign Total Trade Total Trade Canada Canada America/ America/ Affiliate Sales Affiliate Sales Total Trade Total Foreign Caribbean Caribbean Affiliate Total Trade Total Foreign Sales Affiliate Sales

Foreign Affiliate Sales: Estimates for 2019. Total Trade: Data for goods & services, 2019. South/Central America and Caribbean includes Mexico. Source: Bureau of Economic Analysis.

What is often missing from this either-or picture, The Ties That Bind – Quantifying the however, is the fact that many U.S. and European firms Transatlantic Economy use each other’s markets as a launchpad to other parts of the world. Many European car companies, As we outline and emphasize each year in this for instance, invest in the United States and then annual survey, it is investment and the activities export cars made in the U.S.A. to China and other of foreign affiliates, not trade, that drives U.S.- countries. U.S. services companies, in turn, use the European commerce. Understanding this dynamic scale offered by their dense investment linkages with is essential to understanding the enduring strength Europe to be globally competitive when it comes to and importance of the transatlantic economy. offering services in other parts of the world. Many U.S. multinationals also use their presence in stable and Over the past years we have outlined and examined secure Europe to supply both goods and services to eight key indices that offer a clear picture of the the burgeoning, but often volatile, markets of North “deep integration” forces binding the U.S. and Europe Africa and the Middle East. together. This chapter updates those indices with the latest available data and our estimates. Each metric, in general, has ebbed and flowed with cyclical swings in transatlantic economic activity, but has nevertheless grown in size and importance over the past decade.

1. Gross Product of Foreign Affiliates

As standalone entities, U.S. affiliates in Europe and European affiliates in the United States are among the largest and most advanced economic forces in the world. The total output, for instance, of U.S. affiliates in Europe (an estimated $740 billion in The transatlantic economy 2019) and of European affiliates in the U.S. ($723 billion) was greater than the total gross domestic A launchpad to the rest of the product of most countries. For example, combined transatlantic affiliate output – over $1.4 trillion – was world for U.S. and European larger than the output of such countries as Australia, companies Spain, Mexico or Indonesia.

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Total output of foreign affiliates U.S. affiliate output (2019 estimate) (2018)

$740 billion U.S. in Europe $723 billion $720 bn $386 bn Europe in the U.S. Europe Asia-Pacific

By our estimation, European affiliate output in the affiliates (€27 billion) and other major affiliates based United States rose 4.9% in 2019, while U.S. affiliate in Europe.2 output in Europe increased 2.8%. We expect U.S. foreign affiliate output to decline in the near term, In the United States, meanwhile, European due to weaker economic conditions caused by the companies are major economic producers, with global pandemic. European affiliates operating in British firms of notable importance. The value added the United States also saw their output deteriorate of British companies in the United States reached an in 2020, as stay-at-home orders and the shutdown estimated $178 billion in 2019, about one-quarter of of many services industries halted economic activity. the European total. For the same year, output from We expect this activity to swiftly rebound after the German affiliates operating in the United States pandemic. totaled $135 billion, or 19% of the European total.

On a global basis, the aggregate output of U.S. In 2018, the last year of available data, European foreign affiliates exceeded $1.5 trillion in 2019, with affiliates in the United States accounted for 61% of Europe (broadly defined)1 accounting for around the roughly $1.1 trillion that U.S. affiliates of foreign 49% of the total. multinationals contributed overall to U.S. aggregate production. Looking at actual figures for 2018 from the Bureau of Economic Analysis, U.S. affiliate output in Europe Beyond Europe, only Canada and Japan have a ($720 billion) was roughly double the U.S. affiliate significant economic presence in the United States. output in the entire Asia-Pacific region ($386 Japanese affiliate output totaled $161 billion in 2018, billion). Additionally, according to the latest figures the last year of available data, while Canadian affiliate from Eurostat, the value added of non-financial U.S. output was $125 billion. And for all the hype about businesses in the EU28 (€490 billion in 2017) dwarfs Chinese investments in the U.S., Chinese affiliate the output of Japanese affiliates (€75 billion), Chinese output in the U.S. amounted to only $16 billion.

Beyond Europe, only Canada and Japan have a significant economic presence in the United States

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U.S. foreign assets in Europe U.S. foreign affiliate employment in Europe has $17.3 trillion increased steadily since the turn of the century, (2019 estimate) with affiliate employment in Europe rising from 3.7 million workers in 2000 to 4.8 million workers in 2018 – a 30% increase. We estimate that U.S. affiliates in 60% of total U.S. Europe employed 4.9 million workers in 2019, a 1.6% foreign assets increase from the year before. globally Table 3 The U.S. - European Employment Balance Thousands of employees, 2019*, select countries

U.S. European Companies Companies Employment 2. Assets of Foreign Affiliates Country in Europe in the U.S. Balance Austria 47.6 29.1 -18.5 Corporate America and Corporate Europe each have significant asset bases around the world, especially Belgium 126.9 67.9 -59.0 in each other’s markets. According to the latest Czech Republic 79.8 0.1 -79.7 figures from the Bureau of Economic Analysis, U.S. Denmark 45.3 42.0 -3.3 foreign assets in Europe totaled $17.1 trillion in 2018, Finland 21.2 36.3 15.1 representing roughly 62% of the global total. For 2019, we estimate that U.S. foreign assets in Europe France 505.9 799.5 293.6 exceeded $17.3 trillion, close again to 60% of the Germany 685.9 882.2 196.3 global total. The largest share of U.S. assets in Europe Greece 15.7 3.8 -12.0 was in the UK, which accounted for assets of $5.4 Hungary 69.1 0.2 -68.9 trillion, around 20% of the global total. Ireland 136.7 344.8 208.1 U.S. assets in the Netherlands (around $3 trillion) Italy 253.9 96.0 -157.9 were the second largest in Europe in 2018, but were Luxembourg 29.1 20.0 -9.2 down 6.8% from the prior year. America’s significant Netherlands 266.8 563.7 296.9 presence in the Netherlands reflects its strategic role as an export platform/distribution hub for U.S. firms Norway 43.1 8.1 -35.0 doing business across the continent. To this point, Poland 207.2 1.0 -206.2 more than half of U.S. affiliate sales in the Netherlands Portugal 32.4 1.0 -31.4 are for export, particularly within the EU. Romania 77.2 0.0 -77.2 Meanwhile, America’s asset base in Germany ($905 Spain 178.6 92.7 -85.9 billion in 2018) was about 30% larger than its asset Sweden 75.3 234.8 159.6 base in all of South America. America’s assets in Ireland Switzerland 101.9 490.4 388.6 ($2.0 trillion in 2018) and Switzerland ($1.0 trillion) were each much larger than those in China ($466 billion). United Kingdom 1,487.5 1,302.8 -184.6 Europe 4,869.7 5,036.6 166.9 As for foreign-owned assets in the United States, Europe’s stakes are sizable and significant. Total Note: Employment balance "+" favors the United States assets of European affiliates in the United States were Source: Bureau of Economic Analysis. valued at roughly $8.1 trillion in 2018. The UK ranked *2019 Estimates. Majority-owned bank and non-bank affiliates. first in Europe, followed by Germany, France, and Switzerland. In 2018, the last year of available data, While aggregate employment levels continue to rise European assets in the United States accounted for modestly, manufacturing employment has plateaued 55% of all assets held by foreign-owned corporations since 2000. U.S affiliate manufacturing employment in the United States. in Europe totaled 1.9 million in 2000, on par with the levels of 2018. However, while the overall number has 3. Affiliate Employment stayed roughly the same, the country composition has changed, with more investment shifting to U.S. and European foreign affiliates are a major source lower-cost locales like Poland and Hungary versus of employment for the transatlantic workforce. high-cost economies like the UK and France. The Indeed, on a global basis, affiliates of both U.S. and largest employment declines were reported in the European parents employ more workers in the United UK, with the total manufacturing work force falling States and Europe than in other places in the world. from 431,000 in 2000 to 293,000 in 2018. U.S.

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U.S. foreign affiliate European foreign affiliate employment in Europe employment in the U.S.

4.9 million 5 million workers workers (2019 estimate) (2019 estimate)

manufacturing employment in France dropped from Wholesale employment was among the largest 249,000 to 195,000. U.S. manufacturing employment sources of services-related employment, which in Germany has registered far less decline – from includes employment in such activities as logistics, 388,000 in 2000 to 362,000 in 2018. Poland trade, insurance, and other related functions. continues to be a significant winner, with U.S. affiliate manufacturing employment growing more than 2.5 Although services employment among U.S. affiliates times, from 51,000 in 2000 to over 131,000 in 2018. has grown at a faster pace than manufacturing employment over the past decade, U.S. affiliates On a global basis, U.S. majority-owned affiliates employed more manufacturing workers in Europe (including banks and non-bank affiliates) employed in 2018 (1.9 million) than in 1990 (1.6 million). This 14.4 million workers in 2018, with about one-third reflects the EU enlargement process, which offered of these workers living in Europe. Europe’s share of both U.S. and European companies greater access to U.S. affiliate manufacturing employment is slightly more manufacturing workers, and the premium U.S. larger at 34%, although this share is down from 40% firms place on highly skilled manufacturing workers, in 2009. U.S. overseas capacity has been expanding with Europe one of the largest sources of such skilled at a faster pace in emerging markets than developed talent in the world. nations. Another factor at work: more and more U.S. firms are opting to stay home due to competitive Combined, the transatlantic workforce directly wage and energy costs, as opposed to shipping employed by U.S. and European foreign affiliates more capacity abroad. in 2018 was roughly 9.7 million strong, up roughly 2% from the year before. Yet, affiliate employment Indeed, the latest annual data on U.S. manufacturing growth in the United States in 2018 far outpaced employment indicates that American companies growth of U.S. affiliates in Europe. In 2018, the latest reshoring jobs to the U.S. in 2020 created more jobs year of available data, the U.S.-based workforce than FDI for the first time in seven years. According of European companies increased by 4.1%. On the to the Reshoring Initiative, the estimated number of other side of the Atlantic, U.S. firms increased their manufacturing jobs created by greenfield investment European employment base by just 0.4%. This was roughly 42,000, compared to 69,000 reshored caused the employment balance to shift to favor jobs. Digital innovations also mean companies can now the U.S. for the first time in 16 years – meaning that do some things from home that they used to do abroad. European companies now directly employ more Additionally, the 2017 overhaul of the U.S. corporate Americans than U.S. companies employ Europeans. tax code, which lowered America’s tax rate below the rates of many European countries, has spurred more Based on the latest figures, European majority- investment to come home or stay in the United States owned foreign affiliates directly employed 4.9 – more on that in Chapter Five. million U.S. workers in 2018 – some 194,000 more workers than in 2017. In 2018, the top five European Most employees of U.S. majority-owned firms in employers in the United States were the UK (1.3 Europe work in the UK, Germany or France. These million, up 56,400 from 2017), Germany (860,700, firms are, on balance, hiring more people in services up 44,900 from 2017), France (780,000, up 35,600 activities than in manufacturing. The latter accounted from 2017), the Netherlands (550,000, down 7,200 for just 38% of total U.S. foreign affiliate employment from 2017), and Switzerland (478,500, up 21,000 in Europe in 2018. The key industry in terms of from 2017). European firms employed roughly two- manufacturing employment was transportation thirds of all U.S. workers on the payrolls of majority- equipment, with U.S. affiliates employing nearly owned foreign affiliates in 2018. 336,000 workers, followed by chemicals (283,000).

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In 2019, modest gains in employment were most likely 4. Research and Development (R&D) of Foreign achieved on both sides of the pond, with employment Affiliates levels in the United States again rising at a faster pace than in Europe, according to estimates. For 2019 The United States and Europe remain primary we estimate U.S. affiliates based in Europe directly drivers of global R&D. Yet as the globalization of employed about 4.9 million European workers, R&D has gathered pace, more and more global R&D and European affiliates based in the United States expenditures are emanating from Asia in general, directly employed about 5 million Americans. These and China in particular. Beijing has rapidly advanced figures understate the employment effects of mutual its R&D capabilities in areas such as artificial investment flows, since these numbers are limited to intelligence, quantum computing, space exploration, direct employment, and do not account for indirect cybersecurity, life sciences, electric vehicles, employment effects on nonequity arrangements supercomputing, semiconductors, and 5G. An such as strategic alliances, joint ventures, and other important goal of China’s 14th Five-Year Plan (2021- deals. Moreover, foreign employment figures do not 2025) is to make China a global leader in innovation include jobs supported by transatlantic trade flows or and increase self-sufficiency in key technologies. local suppliers. Trade-related employment is sizable in many U.S. states and many European nations. While governments and domestic corporations are the main drivers of R&D spending, foreign affiliates Employment growth rates likely turned negative in of multinationals are also significant contributors. 2020 as real growth and demand plummeted in the In fact, foreign affiliate R&D has become more wake of the coronavirus recession. Employment in prominent in recent decades as firms seek to share Europe was relatively more resilient, due to more development costs, spread risks, and tap into frequent use of subsidized furlough programs. the intellectual talent of other nations. Alliances, Between March and December 2020, the U.S. cross-licensing of intellectual property, mergers unemployment rate averaged 9.0%, while in the EU and acquisitions, and other forms of cooperation the average was 7.3%. have become more prevalent characteristics of the transatlantic economy. The digital economy has Despite the setback, direct and indirect employment become a powerful engine of greater transatlantic remain quite large. We estimate that the transatlantic R&D. The complexity of scientific and technological workforce numbers some 14-16 million workers, innovation is leading innovators to partner and counting both direct affiliate employees as well as share costs, find complementary expertise, gain those whose jobs are supported by transatlantic access to different technologies and knowledge trade. Europe is by far the most important source of quickly, and collaborate as part of “open” innovation “onshored” jobs in America, and the United States networks. Cross-border collaboration with is by far the most important source of “onshored” foreign partners can range from a simple one-way jobs in Europe. transmission of information to highly interactive and formal arrangements. Developing new products, creating new processes, and driving more innovation – all of these activities result from more collaboration between foreign suppliers and U.S. and European firms.

R&D spending of foreign affiliates (2018)

$33 billion $45 billion U.S. in Europe Europe in the U.S.

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Table 4 The Top 20 R&D Spenders

R&D Spending

2019 Change 2019 Company (¤ billion) from 2018 Country Industry

1 Alphabet 23.2 24% United States Software & Computer Services

2 Microsoft 17.2 14% United States Software & Computer Services

3 Huawei 16.7 31% China Technology Hardware & Equipment

4 Samsung 15.5 8% S. Korea Electronic & Electrical Equipment

5 Apple 14.4 14% United States Technology Hardware & Equipment

6 Volkswagen 14.3 5% Germany Automobiles & Parts

7 Facebook 12.1 32% United States Software & Computer Services

8 Intel 11.9 -1% United States Technology Hardware & Equipment

9 Roche 10.8 6% Switzerland Pharmaceuticals & Biotechnology

10 Johnson & Johnson 10.1 5% United States Pharmaceuticals & Biotechnology

11 Daimler 9.6 7% Germany Automobiles & Parts

12 Toyota Motor 9.1 6% Japan Automobiles & Parts

13 Merck U.S. 8.2 -4% United States Pharmaceuticals & Biotechnology

14 Novartis 7.7 -5% Switzerland Pharmaceuticals & Biotechnology

15 Gilead Sciences 7.4 98% United States Pharmaceuticals & Biotechnology

16 Pfizer 7.4 6% United States Pharmaceuticals & Biotechnology

17 Honda Motor 6.8 0% Japan Automobiles & Parts

18 Ford Motor 6.6 -10% United States Automobiles & Parts

19 BMW 6.4 -7% Germany Automobiles & Parts

20 Robert Bosch 6.2 1% Germany Automobiles & Parts

221.6 10.3%

Source: The 2020 EU Industrial R&D Investment Scoreboard. Data as of December 2020. Note: Only companies that disclose their R&D figures according to the Scoreboard methodology can be included in the ranking. Excluded from the ranking is Amazon which, according to the Scoreboard, would be positioned at #1 in the world R&D ranking if it had separated its R&D and content investments in its annual report.

Bilateral U.S.-EU flows in R&D are the most intense over two-thirds of the total – emanated from firms in between any two international partners. In 2018, Europe, given their interest in America’s highly skilled the last year of available data, U.S. affiliates spent labor force and world-class university system. Most $33 billion on research and development in Europe, of this investment by European firms took place in relatively unchanged from the prior year. On a global such research-intensive sectors as pharmaceuticals basis, Europe accounted for roughly 56% of total U.S. & medicine (34% of the total), autos (14% of the R&D conducted abroad by affiliates in 2018, down total) and professional & scientific services (10% of slightly from 2017. R&D expenditures by U.S. affiliates the total). were the greatest in the UK ($6.7 billion), Germany ($6.3 billion), Switzerland ($5.4 billion), Ireland ($3.4 On a country basis, German-owned affiliates were billion), France ($2.1 billion), Belgium ($1.8 billion) the second largest source of R&D in the United and the Netherlands ($1.6 billion). These seven States in 2018, spending some $10.0 billion – just nations accounted for roughly 83% of U.S. spending behind Japan affiliate R&D spending of $10.9 billion. on R&D in Europe in 2018. Swiss firms accounted for 21% of total European R&D spending, or $9.6 billion. British firms accounted In the United States, meanwhile, expenditures on for 15% of European R&D spending, or $6.7 billion. R&D performed by majority-owned foreign affiliates As Table 4 highlights, some of the world’s most totaled $66.9 billion in 2018. As in previous years, innovative companies which invest the most in R&D a sizable share of this R&D spending – $45.1 billion, are domiciled in the United States and Europe.

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5. Intra-firm Trade of Foreign Affiliates Meanwhile, about 39% of U.S. exports to Europe in 2019 represented related-party trade, but the The two main modes of international commerce percentage is much higher for some nations. For – affiliate sales and trade – should not be viewed instance, more than half of total U.S. exports to the independently. They are more complements than Netherlands (56%) were classified as related-party substitutes, since foreign investment and affiliate trade. The comparable figure for Germany was 37% sales increasingly drive cross-border trade flows. and 32% for France. Indeed, a substantial share of transatlantic trade is considered intra-firm or related-party trade, which 6. Foreign Affiliate Sales is cross-border trade that stays within the ambit of the company. Intrafirm or related party-trade occurs U.S. majority-owned foreign affiliate sales on a global when BMW or Siemens of Germany sends parts to basis (goods and services) totaled an estimated BMW of South Carolina or Siemens of North Carolina; $7.0 trillion in 2019. Total U.S. exports, by contrast, when Lafarge or Michelin sends intermediate were $2.5 trillion in 2019. This gap underscores the components to its Midwest American plants, or when primacy of foreign affiliate sales over U.S. exports. Caterpillar or 3M ships components from Illinois or Minnesota to affiliates in Poland or the UK. As usual, Europe accounted for the bulk of U.S. affiliate sales in 2019 – about half of the global total. Table 5 Related Party Trade, 2019 We estimate that U.S. foreign affiliate sales in Europe totaled $3.4 trillion, up 3.2% from the prior year. By U.S. Imports: U.S. Exports: comparison, sales of U.S. affiliates in Asia were just "Related "Related $1.9 trillion, about half the value of sales conducted in Party Trade" Party Trade" Europe in 2019. Affiliate sales in the UK (an estimated Country as % of Total as % of Total $724 billion) were more than double total sales in European Union (incl. UK) 62.9 38.7 South America. Sales in Germany ($385 billion) were Germany 69.5 37.1 more than double the combined sales in Africa and France 47.7 32.4 the Middle East. Ireland 87.0 37.0 Affiliate sales are also the primary means by which Netherlands 70.3 56.1 European firms deliver goods and services to UK 54.3 32.4 customers in the United States. In 2019, for instance, we estimate that majority-owned European affiliate Source: U.S. Census Bureau. sales in the United States ($2.8 trillion) were more Data as of January 2021. than triple U.S. imports from Europe ($852 billion). By country, sales of British firms were the largest The tight linkages between European parent ($714 billion) in 2019, followed by Germany ($555 companies and their U.S. affiliates are reflected in billion), and the Netherlands ($410 billion), according the fact that roughly 63% of U.S. imports from the to estimates. For virtually all countries in Europe, European Union consisted of related-party trade in foreign affiliate sales were easily in excess of their 2019, the last year of available data. That is much exports to the U.S. in 2019. higher than related-party imports from the Asia- Pacific region (37%) and well above the global average (49%). The percentage was even higher in the case of Ireland (87%), the Netherlands (70%) and Germany (70%).

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Foreign affiliate sales (2019 estimate) $3.4 trillion $2.8 trillion U.S. in Europe Europe in the U.S.

Table 6 Sales of U.S. Affiliates in Europe vs. U.S. Exports to Europe

3,6003600 3,4003400 3,2003200 3,0003000 2,8002800 2,6002600 2,4002400 2,2002200 2,0002000 1,8001800 1,6001600

U.S. $ Billions U.S. 1,4001400 1,2001200 1,0001000 800 600 400 200 0 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19*

U.S. Foreign Affiliate Sales in Europe Total U.S. Exports to Europe

Source: Bureau of Economic Analysis. Majority-owned non-bank affiliates data: 1987 - 2008. Majority-owned bank and non-bank affiliates: 2009 - 2019. *Foreign Affiliate Sales: Estimates for 2019.

Table 7 Sales of European Affiliates in the U.S. vs. U.S. Imports from Europe

3,0003000 2,8002800 2,6002600 2,4002400 2,2002200 2,0002000 18001,800 16001,600 1,4001400 1200

U.S. $ Billions U.S. 1,200 1,0001000 800 600 400 200 00 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19*

European Foreign Affiliate Sales in the U.S. Total U.S. Imports from Europe

Source: Bureau of Economic Analysis Majority-owned non-bank affiliates: 1987 - 2006. Majority-owned bank and non-bank affiliates: 2007 - 2019. *Foreign Affiliate Sales: Estimates for 2019.

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7. Foreign Affiliate Profits earned/reported in either the Netherlands ($84 billion), Ireland ($63 billion), or the United Kingdom Prior to the coronavirus outbreak and global recession, ($57 billion). transatlantic profit growth had been healthy, hitting new highs in 2019. However, as businesses shut down The other side of transatlantic profits – European and companies suffered major losses, profits sunk in affiliate income earned in the United States – suffered the second quarter of 2020, dragging down the full even greater losses in 2020, based on three quarters year figures. By our estimates, U.S. affiliate income of data. After rising to the second highest amount earned in Europe fell 15% in 2020 to $254 billion. This on record in 2019, we estimate that full year affiliate figure for 2020 was still more than 40% larger than income earned in the United States by European the depressed levels of 2009, when affiliate income firms dropped by 32% in 2020 to $91 billion. earned in Europe plunged to $179 billion. The United States remains the most important Europe remains an especially important market to market in the world in terms of earnings for many U.S. multinationals, accounting for roughly 55% of European firms. Multinationals based in Germany, the U.S. global foreign affiliate income in the first nine United Kingdom, and Switzerland earned the most months of 2020. By comparison, U.S. affiliate income profits in the U.S. in 2020, however, profits in these from China and India in 2019 ($17 billion), the last countries were down roughly 40% from the same year of full data, was a fraction of what U.S. affiliates period a year earlier.

Table 8 U.S. Earnings in Europe Hit New Highs in 2019, Prior to COVID-19 (U.S. foreign affiliate income earned in Europe)

325325

300 298 300 288

275275 265 254 250 245 241 234 236 225225 217 217 222 200 197 176 179 175175 154 150150 136

U.S. $ Billions U.S. 125125 114 100 100 86 7575 66 65 58 48 51 54 50

2525

0 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20* Source: Bureau of Economic Analysis. *Data for 2020 is author's estimate.

Foreign affiliate profits (2020 estimate) $254 billion Dropped by U.S. in Europe 15% 32% $91 billion U.S. in Europe in Europe in the U.S. Europe the U.S.

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Table 9 European Affiliate Earnings in the U.S. Slump to Decade-Low Amid COVID-19 Recession (Foreign affiliate income earned in the U.S.) 150150 137 134

125 124 123 125 120 121 119 109 106 103 100 100100 98 91 83 81 80 7575 61 U.S. $ Billions U.S. 50 49 37 39 30 26 27 2525 14

0 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20* Source: Bureau of Economic Analysis. *Data for 2020 is author's estimate.

8. Transatlantic Services aspect of the transatlantic economic relationship, with the United States and Europe the two leading The global economic downturn in 2020 was heavily services economies in the world. Deep transatlantic concentrated in services activities, with consumer connections in services industries, provided by expenditures for food services, accommodation, mutual investment flows, are the foundation for transportation, health services and recreation falling the global competitiveness of U.S. and European sharply due to COVID-19 restrictions. In the United services companies. In 2019, Europe made up 39% States, severely weak personal consumption in the of total U.S. services exports and 42% of total U.S. services industry was the main driver of the annual services imports. 3.5% contraction in U.S. GDP, contributing 3.44 percentage points of the total decline. Last year, U.S. services exports to Europe reached a record demand for personal goods expenditures rose by $345 billion in 2019. Services exports (or receipts) $150 billion in the United States, a larger increase have been fueled by a number of services-related than in the prior year; however personal consumption activities such as travel, education and financial of services sunk by $545 billion in 2020. services. In 2019, the United States registered a $100 billion trade surplus in services with Europe, versus a Across the Atlantic, Europe’s service-driven economy $223 billion trade deficit in goods. also suffered from a significant pullback in consumer spending in contact-intensive sectors such as hotels, U.S. services trade by category is represented in restaurants, travel, and administrative and support Table 10 below. Four of the top ten export markets services. These are also key sectors for transatlantic for total U.S. services in 2019 were in Europe. The trade in services, which overall witnessed a 20% UK ranked first, followed by Ireland (ranked 4th), decline in the first three quarters of 2020, compared Switzerland (6th), and Germany (7th). Of the top ten with the same period a year ago.3 service providers to the United States in 2019, five were European states, with the UK again ranking first, Excluding the effects from the pandemic, trade Ireland third, Germany fourth, Switzerland seventh, in services has become an increasingly important and France ninth.

The global economic downturn in 2020 was heavily concentrated in services activities

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Table 10 Top Markets for U.S. Services Trade (Billion of $), 2019

U.S. Services Exports

Rank Total Services Travel Other Business Financial IP Charges Transport Telecom/Info 1 UK 78.3 China 29.0 Ireland 28.6 UK 18.9 Ireland 17.8 Japan 8.5 Canada 6.0 2 Canada 67.7 Canada 16.9 Switzerland 20.0 Canada 8.5 Switzerland 17.2 Canada 8.4 UK 5.3 3 Ireland 57.5 Mexico 15.3 UK 16.8 Japan 5.0 China 8.1 UK 7.8 Japan 4.0 4 China 56.5 India 13.2 Canada 15.2 China 4.8 Canada 7.5 China 5.5 Ireland 3.4 5 Japan 50.1 UK 12.2 Singapore 13.6 Ireland 4.7 Japan 6.9 Germany 5.4 Brazil 3.4 6 Switzerland 46.8 Japan 8.8 Germany 10.8 Luxembourg 4.6 UK 6.3 S. Korea 4.2 Switzerland 3.0 7 Germany 36.6 Brazil 8.3 Japan 10.1 Australia 3.5 Netherlands 5.3 France 3.5 Australia 2.5 8 Mexico 32.9 S. Korea 7.4 Netherlands 5.9 Germany 3.5 Germany 5.2 Mexico 3.2 Germany 2.3 9 Brazil 24.6 Australia 7.0 France 4.6 Mexico 3.2 Hong Kong 4.7 Brazil 2.7 Mexico 2.1 10 India 24.3 Germany 5.8 China 4.1 Brazil 2.9 S. Korea 4.2 Hong Kong 2.4 India 1.8 Total 875.8 Total 193.3 Total 189.4 Total 135.7 Total 117.4 Total 91.1 Total 55.7

U.S. Services Imports

Rank Total Services Travel Other Business Financial IP Charges Transport Telecom/Info 1 UK 62.3 Mexico 18.9 UK 15.3 UK 12.3 Japan 9.7 Japan 9.5 India 15.6 2 Canada 38.6 Canada 9.2 India 8.9 Canada 3.0 Germany 7.0 Germany 8.3 Ireland 6.6 3 Japan 35.8 UK 9.1 Canada 8.5 Japan 2.1 Switzerland 5.3 UK 8.1 Canada 4.9 4 Germany 34.9 Italy 7.8 Ireland 8.0 Hong Kong 1.7 UK 4.3 France 6.3 UK 3.3 5 Mexico 29.8 France 5.4 Germany 7.2 France 1.5 France 2.8 Canada 5.9 Philippines 1.4 6 India 29.7 Spain 4.3 China 7.2 Singapore 1.4 Ireland 2.3 China 5.7 Netherlands 0.9 7 Switzerland 25.0 China 3.7 Switzerland 6.8 China 1.1 Canada 2.0 Taiwan 5.1 Mexico 0.9 8 Ireland 23.2 Japan 3.6 Netherlands 6.0 Australia 1.0 Netherlands 1.2 Mexico 4.9 Germany 0.8 9 France 20.4 Germany 3.3 Singapore 4.9 Germany 0.9 India 1.2 Hong Kong 4.6 Switzerland 0.7 10 China 20.1 India 2.6 Japan 3.8 Switzerland 0.7 Mexico 0.8 S. Korea 4.1 Japan 0.5 Total 588.4 Total 134.6 Total 113.6 Total 40.4 Total 42.7 Total 107.5 Total 43.7

Source: Bureau of Economic Analysis. Data as of January 2021.

In terms of transport services, the top five export the depressed levels of 2009. The UK, Germany, markets in 2018, in ranked order, were Japan, the Switzerland, Ireland, France, and Italy all rank as top UK, Canada, China, and Germany. The UK ranked as services exporters to the United States. the largest market for exports of financial services and second in telecommunications, computer and In terms of exports of travel to the United States, information services, after Canada. Ireland was countries in Southern Europe have the largest the top export market for U.S. trade in intellectual exposure to U.S. residents traveling abroad. In property and other business services, representing Portugal, travel makes up 72% of the country’s total 15% of total receipts in each category. services exports to the United States. The share for Croatia is 71%, Spain 55%, Greece 58%, and Italy 65%. As for U.S. services imports from Europe, figures for In total, Europe made up 32% of U.S. trade in travel 2019 were also at all-time highs. U.S. services imports and transport in 2019. from Europe totaled $245 billion, up over 40% from

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Table 11 U.S. - Europe Services Linkages

1,0001000

900900

800800

700

600600

500500

400400 U.S. $ Billions U.S.

300300

200200

100

0 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

U.S. Affiliates Services Supplied in Europe. U.S. Services Exports to Europe Source: Bureau of Economic Analysis. Majority-owned bank and non-bank affiliates. Services supplied in Europe estimates for 2019.

Table 12 Europe - U.S. Services Linkages

700700 650650 600600 550550 500500 450450 400400 350350 300300 U.S. $ Billions U.S. 250250 200200 150150 100100 5050 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

European Affiliates Services Supplied in the U.S. U.S. Services Imports from Europe Source: Bureau of Economic Analysis. Majority-owned bank and non-bank affiliates. Services supplied in the U.S. estimates for 2019.

The trade figures, while significant, do not do full Worldwide affiliate sales of U.S. services more than justice to the importance of the transatlantic services doubled in the years from 2005 to 2018. economy. Transatlantic foreign affiliate sales of services are much deeper and thicker than traditional Sales of services of U.S. foreign affiliates in Europe trade figures suggest. Indeed, sales of affiliates have surged in 2018, rising 12% to $938 billion. By exploded on both sides of the Atlantic over the past comparison, U.S. services exports to Europe in 2018 few decades thanks to falling communication costs totaled $334 billion, well below sales of services and the rise of the digital economy. Affiliate sales by affiliates. In other words, like goods, U.S. firms of services have not only supplemented trade in primarily deliver services in Europe (and vice versa) services; they have also become the overwhelming via their foreign affiliates, rather than by trade. mode of delivery in a rather short period of time.

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Foreign direct investment and foreign affiliate sales, not trade, represent the backbone of the transatlantic economy

The UK made up 28% of all U.S. affiliate services sales Table 13 America’s FDI Roots in Europe (Billions of $) in Europe; affiliate sales totaled $267 billion in the UK, a figure greater than total affiliate sales in South and U.S. FDI to Europe’s % of Central America ($124 billion), Africa ($14 billion), Industry Europe Total U.S. FDI or the Middle East ($22 billion). Affiliate sales of European Total, all 3,572 60% services in Ireland remain quite large – $165 billion in industries 2018 – and reflect strong U.S-Irish foreign investment Manufacturing 477 53%

ties with leading U.S. internet, software, and social Note: Historic-cost basis, 2019. media leaders. Europe accounted for roughly 55% of Source: Bureau of Economic Analysis. total global U.S. affiliate service sales.

We estimate that sales of services of U.S. affiliates in Table 14 Europe’s FDI Roots in the U.S. (Billions of $) Europe rose by around 3%, to $968 billion in 2019. U.S. services exports to Europe for the same year U.S. FDI from Europe’s % of were $345 billion. Industry Europe Total U.S. FDI Total from Europe, all 2,871 64% U.S. affiliate sales of services in Europe continue to industries exceed sales of services by U.S. affiliates of European Manufacturing 1,318 74% firms. In 2018, the last year of complete data, Note: Historic-cost basis, 2019. European affiliate services sales in the United States Source: Bureau of Economic Analysis. totaled $636 billion, about 32% below comparable sales of U.S. affiliates in Europe. That said, European affiliates are the key provider of affiliate services in These eight indices convey a more complex and the United States. Foreign affiliate sales of services complete picture of U.S.-European engagement in the U.S. totaled $1.2 trillion in 2018, with European than trade figures alone. Transatlantic commerce firms accounting for 54% of the total. Within Europe, goes well beyond trade. Foreign direct investment British affiliates lead in terms of affiliate sales of and foreign affiliate sales, not trade, represent the services in the United States ($161 billion), followed backbone of the transatlantic economy. The eight closely by Germany ($151 billion). variables just highlighted underscore the depth and breadth of the transatlantic commercial relationship. We estimate that European affiliate services sales in the United States totaled $664 billion in 2019, well above U.S. services imports from Europe ($245 billion) in the same year. The difference between affiliate sales and services imports reflects the ever- widening presence of European service leaders in the U.S. economy.

Endnotes

1 See Notes on Terms, Data and Sources in the back of the study for complete definition of broader Europe. 2 Data for 2017 is latest available. Value added measured at factor cost. Excludes financial and insurance businesses. Data may differ from U.S. Bureau of Economic Analysis data due to differences in measurement methodology. 3 Transatlantic services trade is defined here as total exports of services from the U.S. to the EU (including the UK), and the total imports of services from the EU (including the UK) to the U.S.

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3 The United States, Europe and China: Different Now, But Changing Again

New Jersey Belgium

Poland

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Asia-Pacific region and the world

60% 35% of the of global world’s GDP population

40% 30% of world of global trade consumption

When we issued our first report on the transatlantic superpower in global trade, a significant exporter of economy almost two decades ago, the world was a capital, and a world leader in a number of cutting- simpler place. Global commercial ties rested squarely edge industries, from quantum computing to life on the shoulders of the United States and Europe. sciences. Its $15 trillion economy is second in size Asia, collectively, was an important node of the global only to that of the United States. economy, but more or less followed the rule-setting global standards of the transatlantic partnership. At On a per-capita basis, of course, China still has far the time, Asia’s three largest economies – Japan, to go. Per-capita GDP in China ($10,262 in 2019) China and India – did not pull much global weight. significantly lags that of the United States ($65,298) Japan’s economy was entering yet another “lost and EU member states ($34,919 on average). decade.” China’s global integration was shallow and Household consumption as a share of GDP is still by underdeveloped. India remained too poor to cause far the lowest of any major economy. global ripples. The transatlantic partnership led. The rest of the world, Asia included, followed. Nonetheless, China’s impressive economic strides, together with the sheer scale of its immense Two decades on, things have changed. The Asia- population and the huge sweep of its resource Pacific region, which accounts for more than 60% and related needs, have made China a global of the world’s population, now accounts for roughly heavyweight. Like other rising great powers in 40% of world trade, 35% of global GDP and 30% of history, China wants to match its economic stature global personal consumption.1 It is a region of great with more global influence – in the Asia-Pacific, wealth ($40,200 per capita income in Japan), great the Middle East, Africa, Latin America, Eurasia poverty ($2,100 per capita income in India), and and Europe. It seeks a larger voice in multilateral continued rivalries. Yet some countries across this institutions like the United Nations, the International vast space have forged pathbreaking economic ties, Monetary Fund, and the World Health Organization. first in 2018 via the Comprehensive and Progressive It is constructing alternative regional organizations Agreement for Trans-Pacific Partnership (CPTPP), such as the Asian Infrastructure Investment Bank and a free trade agreement between seven Asian has advanced a new type of “connectivity politics” countries and Canada, Mexico, Chile and Peru; and via its Belt and Road Initiative. It is challenging in December 2020 via the Regional Comprehensive basic norms of the rules-based international order Economic Partnership (RCEP), now the world’s and attempting to define new technical standards largest trading bloc, encompassing ten countries of in a host of international bodies. It has ignored Southeast Asia, plus South Korea, Japan, Australia, international legal rulings that have questioned its New Zealand, and China. assertions of territorial and maritime sovereignty. All of this has raised fears of the so-called “Thucydides Perhaps the most profound change is China’s trap” – a scenario where a rising star (China) and an transformation from bit player to global heavyweight. established power (the United States) end up, like China has become a manufacturing juggernaut, a Athens and Sparta, at war.

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Politics and Profits other high-tech sectors, poor implementation of its WTO obligations, and its overcapacity in steel and For most of this century, China’s relations with the potentially autos, robotics and other sectors of the United States, Europe, and Asian democracies ebbed economy. They too are wary of investments by state- and flowed between cooperation and competition. owned Chinese firms in strategic infrastructure and Tensions would flare up, but never burned too hot or technologies in Europe, the United States, and other too long. That has changed in recent years, spiked countries. Europe also shares U.S. concerns about in particular by antagonism between Washington China’s human rights abuses. and Beijing. While the COVID-19 pandemic pushed U.S.-China relations over the edge, the split between Nonetheless, for most of the past decade, many the two parties was years in the making. Even before European countries have preferred to look at China the election of Donald Trump – the most aggressive, primarily through the prism of economic opportunity get-tough-with-China president in modern times – a lucrative market for German carmakers and – bilateral relations were adrift and fraying at the French and Italian luxury goods companies, and a seams. Tensions have long been stoked by the potential source of capital for hard-pressed countries hollowing out of the U.S. manufacturing base, with in central and eastern Europe. U.S. politicians on both sides of the aisle faulting China’s unfair trade practices for the decimation of Despite China’s transgressions on trade agreements U.S. jobs and incomes. America’s ever-expanding and investment protocols, many countries and trade deficit with China has been a perennial sore companies preferred profits to politics. As a result, spot for various U.S. administrations for years. Also China has emerged as one of the largest and undermining relations: Beijing’s state-sponsored most dynamic consumer markets in the world, policies like “indigenous innovation,” “Made in China underpinning global automakers, food and beverage 2025,” “civil-military fusion,” its treatment of Uighur firms, technology and financial leaders, aerospace and other minorities, efforts to export its brand of firms, airlines, and many other enterprises. General digital illiberalism, its anti-democratic crackdown Motors now sells more vehicles in China than in the in Hong Kong, and efforts to bully non-compliant United States; the same holds true for Germany’s actors. premier automakers like BMW and Mercedes Benz. Pick virtually any sector – luxury goods, fitness European countries share many of these U.S. apparel, fast food – and there is a good chance that concerns. They too are frustrated by Beijing’s China rivals the United States as the top market cybertheft and disruption activities, its assaults on in the world, due to its burgeoning middle class intellectual property, its efforts to pressure companies consumer base. China accounted for a staggering into technology transfer arrangements, market- 27% ($5.59 trillion) of total consumer spending of distorting subsidies, shutting out non-Chinese digital developing nations in 2019. That is almost equivalent companies from the Chinese market, restrictions to the combined annual consumer spending of on foreign investments in services, agriculture and Germany, the UK and India ($5.58 trillion).

Consumer spending (2019)

China Germany + UK + India

$5.6 trillion $5.6 trillion

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Trade in goods and services (2020)

+40%

¤ 657 bn ¤ 950 bn EU27-China EU27-U.S.

Commerce Is More Than Trade, and totaled ¤657 billion in 2020, while EU27-U.S. trade Trade is More Than Flows of Goods was ¤950 billion – 40% higher.4

China’s rise has translated into burgeoning trade in In short, if you look at overall trade flows and not goods, including with Europe. According to figures just one kind of flow, it is clear that the EU’s largest from the IMF, EU28 goods exports to China expanded trading partner is actually the United States, as it has at a compounded annual rate of 13.2% between 2000 been for decades. and 2019, compared to 4.5% annual growth in exports to the United States. EU28 goods imports from China, The Two-Lane Highway vs. the meanwhile, rose 10.7% over the same time period, Twelve-Lane Autobahn while U.S. goods imports expanded by just 2.7%. Just as trade is more than just flows of goods, These numbers have reinforced a fairly widespread – international commerce is more than just trade. yet incorrect – view that China has become Europe’s Reducing complex commercial ties to one metric – top commercial partner, reinforced by a February trade in goods – ignores the importance not only of 2021 report by Eurostat, the EU’s statistical agency, services, but a host of additional economic ties that that EU27 goods trade with China in 2020 totaled bind the EU and the United States in far deeper ways ¤586 billion, compared to ¤555 billion in EU27 trade than those that bind either to China.5 with the United States. That is a significant change from 2019, when EU27 trade with the United States U.S. and European commercial ties with China are was ¤617 billion, whereas EU27 goods trade with akin to a two-lane highway, whereas their commercial China was ¤561 billion.2 ties with each other are more like a twelve-lane Autobahn. Trade between countries, however, doesn’t just consist of trade in goods. It also includes trade in The highways to and from China are full of goods. services, which the Eurostat report did not include. They are busy, and they are crowded. Any type of Services trade has been growing faster than goods accident on a two-lane highway can really snarl traffic trade. More European and American jobs depend – as we saw when supply chains were disrupted by on services than on goods, and the United States the pandemic and by the U.S.-China tariff war. remains the EU’s top services trade partner. Alongside the highway are narrow bike lanes for While final numbers for trade in services are not yet services. The EU and China have been busy trying to available for the full year 2020, we do have data for build a new lane on their highway – an investment path the first three quarters of the year. Trade in services that they believe could unsnarl some of that traffic between the EU and the United States during that and add to their overall connections. Despite the period was ¤296.3 billion – five times more than the EU-China Comprehensive Agreement on Investment trade in services between the EU and China, which inked in December 2020, however, that investment totaled ¤53.3 billion.3 lane remains a construction site, as opposition has arisen in some member states and in the European If we annualize those figures to estimate the EU’s Parliament, which ultimately have to sign off on a total trade in goods and services for 2020, we find final deal. Road construction on that deal is likely to that EU27-China trade in goods and services likely continue through 2021.

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The ties that bind the EU to the United States are much thicker and far deeper than those that bind either to China

The commercial highway connecting the EU with the Europe’s role vis-à-vis the United States is very United States, in contrast, looks more like a twelve- similar. Measured on an historic cost basis, the total lane Autobahn. Not only are there fewer speed stock of U.S. FDI in Europe was $3.6 trillion in 2019 limits and an even wider lane for goods, there are – 60% of America’s total global investment position additional lanes for services, investment streams, and and almost four times U.S. investment in the Asia- sales of companies on each side of the Atlantic. The Pacific region. U.S. FDI in the UK in 2019 was seven transatlantic digital lanes carry 75% of global digital times more than such investment in China. Equivalent content. The innovation lanes hosting research and U.S. investment in Germany was 1.3 times more than development flows are the most intense between any in China. two international partners. The jobs lanes provide employment for 16 million Europeans and Americans. When flows from holding companies are removed, Europe still accounted for over half of total U.S. FDI We show throughout this report that on each of outflows globally and more than double the share to these metrics, the ties that bind the EU to the United Asia over the past decade through 2019. States are much thicker and far deeper than those that bind either to China. In the first three quarters of 2020, U.S. companies invested $55 billion in Europe, seven times more than what Chinese firms invested in Europe. And despite Share of the EU's total outward the pandemic-induced recession, U.S. companies in FDI position globally 2020 earned an estimated $254 billion from their (2018) operations in Europe – 23 times what they earned from operations in China. U.S. Deep and thickening transatlantic investment ties 32% contrast starkly with FDI coming to each continent from China. For some years Chinese FDI in both the China United States and Europe soared from a relatively 2.5% low base. However, Chinese investment is now plummeting on both continents due to bilateral commercial tensions and tighter U.S. and European The U.S. accounted for 32% of the EU’s total scrutiny of such investments (Table 1). Chinese outward FDI position globally in 2018, whereas China investment flows to the United States rose slightly to accounted for just 2.5% of the total. Total European approximately $6.4 billion last year, although Chinese stock in the United States of $2.9 trillion in 2019 FDI in Europe fell by 44% to $7.5 billion. Relatively was more than three times the level of comparable low Chinese FDI, in turn, generates relatively few investment from Asia. Germany’s total FDI stock in U.S. and European jobs. Mutual flows of investment the United States totaled $373 billion in 2019. Chinese across the Atlantic, in contrast, provide directly for FDI stock in the United States was only one-tenth of close to 10 million jobs. that total ($37 billion).

Chinese investment is now plummeting in both the EU and the U.S. due to bilateral commercial tensions and tighter investment screening

35 - THE TRANSATLANTIC ECONOMY 2021 3 - The United States, Europe and China: Different Now, But Changing Again

Table 1. Value of Completed Chinese FDI Transactions in Europe vs. U.S. ($ Billions)

80

70

60

50

40

30

20

1010

0 2012 2013 2014 2015 2016 2017 2018 2019 2020

n U.S. n Europe

Data represents greenfield investments and acquisitions that result in significant ownership control (>10% of equity) in the U.S. and Europe, excludes divestitures. Europe includes EU28 plus Norway, Switzerland, Iceland, Liechtenstein. Source: Rhodium Group; Baker McKenzie. Data as of January 2021.

The digital revolution has further enhanced the At the end of the day, U.S. and European multinationals importance of the transatlantic economy in make their living on the other side of the Atlantic, comparison with U.S. and European ties to China. rather than across the Pacific. As one CEO said to U.S. exports of digitally-enabled services to Europe us, “we are positioning ourselves for China. But at in 2019 were double equivalent exports to the entire the moment, we are earning our money in Europe.” Asia-Pacific region, and EU exports of digitally- U.S. affiliate income in Europe during the first nine enabled services to the United States alone were months of 2020 of $180 billion was 25 times more greater than equivalent exports to Asia and Oceania. than U.S. affiliate income in China ($7.1 billion) and roughly 55% of all U.S. global foreign affiliate income. Despite the tremendous political and economic We estimate that income of European affiliates in the headwinds that have buffeted the transatlantic United States in 2020 fell 32% to $91 billion, but that relationship in recent years, the United States was after hitting a near-record level of $134 billion and the EU remain each other’s most important in 2019 – far more than European affiliate income in trading partners and each other’s most significant China and in Asia overall. commercial markets – bar none.

Foreign affiliate income (Q1-Q3 2020)

$180 billion U.S. affiliate income 25X in Europe

$7.1 billion U.S. affiliate income in China

36 - THE TRANSATLANTIC ECONOMY 2021 3 - The United States, Europe and China: Different Now, But Changing Again

All of these facts run counter to the fashionable automotive and communication equipment, but also narrative that U.S. and European companies prefer other key industries such as pharmaceuticals.6 China or other lower-cost nations to developed markets. The reality is different, for several reasons. China’s key role was painfully driven home when First, investing in Europe or the United States is Beijing locked down its economy in late January relatively easy, while investing in China remains 2020. As factories were shuttered across the difficult because of onerous restrictions on foreign country, the ripple effects were felt far and wide. ownership and forced technology transfer rules, Governments and major companies were confronted not to mention heavily subsidized competition with the prospect that many global supply chains from state-owned and state-controlled Chinese had become too complex, too far from home, and companies. Moreover, investors can trust the legal above all else, too China-centric. systems and transparent regulatory models in the United States and across Europe. Not so in China. China’s Hubei province, the original epicenter of the pandemic, is an auto manufacturing hub. When it Second, growth prospects in China have slowed not shut down, auto supply shortages quickly appeared only because of the coronavirus but because Beijing across Asia, Europe and the United States. Shortages has shifted toward more consumption- and services- of key electronic parts and components swiftly led growth and away from export- and investment- emerged, penalizing some of the largest technology driven growth. companies in the world. Apple, reflecting its dependence on China as a key supplier and assembler Third, in addition to being two huge markets, of iPhones, cut its sales expectations following the United States and Europe are wealthy, which China’s lockdown. Textile and apparel designers is correlated with highly skilled labor, rising per were denied their seasonal supply of products as capita incomes, innovation, and world class R&D Chinese factories went quiet. Most distressing was infrastructure, among other things. Together the that Chinese-produced medical supplies, ranging United States and Europe account for half of from masks and ventilators to critical pharmaceutical global consumption, and gaining access to wealthy ingredients, dried up in the world’s greatest hour of consumers is among the primary reasons why U.S. need.7 and European firms invest in each other’s markets. In the pre-COVID-19 world, little concern or attention Rethinking Global Supply Chains was paid to the fact that China was producing half of the world’s medical masks, that nearly three- Most Western companies are in China because quarters of blood thinners imported by Italy were they seek to expand their presence in the Chinese sourced from China, that Japan relied on China domestic market, not because China is a cog in their for 60% of its total imports of antibodies, or that extended global supply chains. Nonetheless, about China accounted for 40% of Germany’s, Italy’s and 20% of global trade in manufacturing intermediate France’s imports of antibodies. According to the products used in supply chains now originates in U.S. Commerce Department, 95% of ibuprofen, 91% China, up from 4% in 2002. Chinese manufacturing of hydrocortisone, 70% of acetaminophen, 45% of is essential to many global supply chains, especially penicillin, and 40% of heparin imported into the those related to precision instruments, machinery, United States in 2018 came from China.8

20% of global trade in manufacturing intermediate products used in supply chains originates in China, up from 4% in 2002.

37 - THE TRANSATLANTIC ECONOMY 2021 3 - The United States, Europe and China: Different Now, But Changing Again

Why companies are reorganizing their global supply chains

Negative impact of too Environment, social much concentration and and governance factors complexity highlighted by prioritized by investors COVID-19

Technological progress and Data security and privacy digital innovations concerns

Changing cost considerations (labor and production)

These dependencies in specific areas do not mean, In addition to robust domestic manufacturing in the however, that China has suddenly come to dominate pharmaceutical sector, the United States draws on a critical supply chains. According to the WTO, diverse array of suppliers to mitigate possible supply Germany is the largest exporter of medical goods chain risks. According to U.S. Census data, Ireland worldwide ($136 billion in 2017, latest available) (21%), Germany (13%), and Switzerland (12%) are followed by the United States as the second largest the top sources of U.S. pharmaceutical imports. Ten exporter of medical goods worldwide, with exports additional countries (eight in Europe plus India and of $116 billion. The United States is the world’s Japan) account for between 3% and 6% each. second largest exporter of ventilators, trailing only Singapore, and the third largest exporter of personal Nonetheless, the pandemic and its ripple effects protective equipment. generated disruptions across both China-centric and transatlantic supply chains. In the end, 950 of The top sources of U.S. imports of medical products Fortune’s top 1000 companies reported supply chain are Ireland ($26 billion), Germany ($16 billion), and disruptions in 2020. Firms across the world were Switzerland ($13 billion). China comes in fourth place forced to re-evaluate how and where to organize their at $12.5 billion, or half Ireland’s figure. global operations. Not only did they realize that some of their supply chains had become too concentrated, Census data on U.S. imports (2019) confirm that the pandemic laid bare the uncomfortable fact that China’s role in pharmaceutical manufacturing has these interconnected webs had also become so been exaggerated. China isn’t even among the top complicated and opaque that even the companies 15 sources of U.S. imports of vaccines or finished involved did not fully understand where intermediate pharmaceutical products (FPPs), and it accounts components and critical materials essential to their for 9% of U.S. imports of antibiotics (active products came from.9 pharmaceutical ingredients (APIs) and FPPs). China was the source for 15% of U.S. imports of APIs and just 4% of U.S. imports of all pharmaceutical products last year.

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Even before the pandemic hit, countries and Changing cost considerations have also caused companies were reconsidering the pros and cons of rethinking. One reason why China became such a allowing China to become “the factory of the world.” critical cog in global supply chains was its competitive Fears have grown that making equipment in China cost of labor and production. That advantage is might put data security and privacy at risk. National disappearing, to the benefit of Mexico and southeast security, already a concern, has become a priority. Asian countries (Table 2). In 1990, China had an average Japan set aside $2.2 billion to help and encourage monthly wage of $55. By 2018, that increased to $990 Japanese firms to relocate from China. The UK – three times higher than in Vietnam and nearly double government launched “Project Defend” to examine that in Mexico. The result: footwear, accessories, toy how to reduce reliance on China. Similar motivations and furniture manufacturers began moving out of shaped the EU’s package of post-pandemic recovery China more than a decade ago. More than 83% of North spending. Just weeks after taking office, the Biden American businesses and about 90% of European administration launched a 100-day review of ways to firms have announced plans to relocate at least part of mitigate U.S. dependencies on supply chains involving their supply chains away from China.10 semiconductors, electric vehicle batteries, rare earth metals and medical products, to be followed by a Environmental, social, and governance (ESG) deeper one-year review of a broader sectors such considerations are also causing a rethink of China- as defense, public health, biological preparedness, centered supply chains. Investors are starting to information and communications technology, signal that they are likely to give greater weight to transportation, energy and food production. the ESG scores of large companies.

Table 2. China’s Disappearing Cost Advantage Cost of making a hypothetical product, selected countries ($)

$1,376 1,400

1,200 $1,000 1,000

$771 $761 800

600

400

200

0 U.S. China Mexico Other Asian countries

n Admin and material costs n Manufacturing costs n Logistics n Fees and tariffs n Other expenses

The hypothetical product is produced in China at a total cost of $1,000. The manufacturing cost is 10% of the cost of goods sold and the logistics cost is 5%. Source: PwC; The Financial Times.

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Finally, as we note in Chapter Three, technological globalization model of just-in-time supply chains built progress and digital innovations are challenging around hyper-efficient cross-border trade in tasks, old assumptions that supply-chain resiliency can be which enabled China to become the world’s factory, achieved only at the cost of efficiency. 11 is reshuffled into a different type of globalization – that is, a globalization built around less complex All of these considerations were already underway and opaque, and more resilient and robust supply before 2020. The pandemic rendered each of them chains framed by China/Southeast Asia on the one more acute. Companies and countries around the hand, and the United States and Europe on the world are looking to redefine the terms of their other. These changes are evident across a number of interdependence. In some cases, this is leading to critical industries, from foodstuffs, pharmaceuticals new strategies of diversification. Others are taking a and semiconductors to medical equipment, critical more extreme step, which they call decoupling.12 materials and defense-related supply chains. All told, McKinsey estimates that as much as $4.6 trillion in The new landscape is likely to be very different trade flows may be rebalanced across geographies than before the pandemic, as the one-world, hyper- in coming years.13

1 Asia here is defined as the entire Asia-Pacific region, including South Asia and developed Asia and Oceania countries including Japan, Australia and New Zealand. 2 Eurostat, “Euro area international trade in goods surplus €29.2 bn,” February 15, 2021, https://ec.europa.eu/eurostat/documents/portlet_file_entry/2995521/6- 15022021-BP-EN.pdf/e8b971dd-7b51-752b-2253-7fdb1786f4d9. 3 Eurostat, balance of payments database, https://ec.europa.eu/eurostat/web/balance-of-payments/data/database. 4 U.S. goods trade with the EU28 in 2020 ($757 billion) was also much larger than U.S. goods trade with China ($560 billion). 5 Unfortunately, a number of public agencies in Europe make the mistake of reducing overall trade to just trade in goods. The German Federal Statistical Office, for instance, consistently proclaims that China is Germany’s top trading partner, even though those claims are patently false if one looks at overall German-China trade, not just trade in goods. 6 UNCTAD, “Global trade impact of the coronavirus (COVID-19) epidemic,” March 4, 2020, https://unctad.org/en/PublicationsLibrary/ditcinf2020d1.pdf. 7 See Jon Emont and Chuin-Wei Yap, “Companies That Got Out of China Before Coronavirus Are Still Tangled in Its Supply Chains,” Wall Street Journal, March 8, 2020. 8 Keith Bradsher and Liz Alderman, “The World Needs Masks. China Makes Them, but Has Been Hoarding Them,” New York Times, April 2, 2020; Daniel F. Runde and Sundar R. Ramanujam, “Global Economy – Recovery with Resilience: Diversifying Supply Chains to Reduce Risk in the Global Economy,” CSIS, https://www. csis.org/analysis/recovery-resilience-diversifying-supply-chains-reduce-risk-global-economy. 9 Nathaniel Taplin and Charley, “If Coronavirus-Stricken China Can’t Export Medicine, the World Is in Trouble,” Wall Street Journal, March 4, 2020; Martijn Rasser, “Pandemic Problem: America's Supply Chains are Dangerously Brittle,” National Interest, March 17, 2020, https://nationalinterest.org/feature/pandemic-problem- americas-supply-chains-are-dangerously-brittle-134022. 10 Kathrin Hille, “The great uncoupling: one supply chain for China, one for everywhere else,” Financial Times, October 6, 2020; Kathrin Hille, “China’s share of global exports falls in supply chains rethink,” Financial Times, August 17, 2020; Runde and Ramanujam, op. cit. 11 See also McKinsey, “Risk, resilience, and rebalancing in global value chains,” August 6, 2020, https://www.mckinsey.com/business-functions/operations/our- insights/risk-resilience-and-rebalancing-in-global-value-chains. 12 Torsten Riecke, “Resilience and decoupling in the era of great power competition,” MERICS, August 20, 2020, https://merics.org/en/report/resilience-and- decoupling-era-great-power-competition. 13 McKinsey, “Reimagining industrial supply chains,” August 11, 2020, https://www.mckinsey.com/industries/advanced-electronics/our-insights/reimagining- industrial-supply-chains; Hille, “The great uncoupling,” op. cit.

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4 The Digital Acceleration

Florida Spain

41 - THE TRANSATLANTIC ECONOMY 2021 4 - The Digital Acceleration

The COVID-19 pandemic has further accelerated 4.2. billion people who will spend a total of 3.7 trillion the digitalization of the transatlantic and global hours on social media in 2021 – equivalent to more economies, even as it has upended the world’s way than 420 million years of combined human existence.5 of living, working and playing. Some industries have been devasted while others have grown more resilient The digital economy is not just connecting billions by fast-tracking their digital transformation. Many of people to each other, it is connecting them to digital pioneers experienced a gold rush as online billions of things, and it is connecting those billions spending surged and virtual conferencing, learning of things to each other as well.6 Cisco estimates that and gaming all skyrocketed. Analysts estimate the 500 billion devices will be connected to the Internet crisis has sped up the adoption of a wide range of by 2030.7 This has prompted former Cisco Chairman digital technologies by at least two years.1 John Chambers to predict that the globe is already moving beyond the Internet of Things (IoT) to what Digital tools powered an unprecedented worldwide he calls “the Internet of Everything: the penetration sharing of gene sequencing data to track and treat of the World Wide Web into the everyday aspects of SARS-CoV-2, the virus that causes the COVID-19 our lives.”8 disease. The first breakthrough vaccine was a triumph of transatlantic collaboration between Germany’s For the transatlantic economy a number of digital BioNTech and U.S.-based Pfizer. The speed at transformations bear watching. which the vaccine was developed was an amazing feat of science that was reliant on barrier-breaking First, as companies and countries in North America synergies between digital and medical advances, and Europe have become more digitized and and not possible for any previous pandemic.2 connected, they have also become more vulnerable to cyberattack and disruption. Cyberattacks spiked When the pandemic subsides, more government during COVID-19, including surreptitious efforts services will be online and more people will work to gain data from scientific and medical research and learn more flexibly. Digital shopping, virtual organizations, the World Health Organization, the fitness, and online courses are all likely to become European Medicines Agency, along with companies, regular fixtures of societies across the Atlantic contact-tracing applications, and hospitals in North and beyond. Digital companies will grow into new America, Europe and around the world.9 Data theft, areas of business and play an even larger role in our cyber-espionage, supply-chain attacks, ransomware lives than they do now. Between 2020 and 2023 efforts and spear-phishing scams all rose sharply companies are expected to spend $6.8 trillion on over the past year. This growing threat landscape has digital transformation. By the end of 2021, 60% of added additional burdens to organizations grappling global GDP will be digitized.3 with business continuity, travel lockdowns, remote working, and generally struggling to stay afloat. It The numbers continue to astound. This year, humans is fueling a cybersecurity market that is expected to will generate 74 zettabytes of data – 840 million times grow to nearly $250 billion by 2023.10 the Internet’s size in 1997.4 More than 5.22 billion people now use mobile phones. 4.66 billion are now Second, the pandemic has spurred the further online. We now spend almost as much time online as digitalization and internationalization of small- and we do asleep. Nearly half a billion people began to medium-sized enterprises (SMEs). While in general use social media in 2020, taking the global total to SMEs tend to lag behind larger firms in terms of digital

The crisis has sped 60% the adoption of a wide range of of global GDP will be digital technologies digitized by the end by at least two of 2021 years

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Digital transformations impacting the transatlantic economy

Rise of Growth of online payments cyberattacks and shopping

Digitization and Advent of the connected internationalization of SMEs factory

adoption, many SMEs turned to online platforms Germany and other advanced manufacturing during COVID-19 to gain efficiencies and access to countries are likely to fare much better when it new markets, sourcing channels and a multitude comes to another new frontier: the advent of the of digital networks offering e-commerce sales, connected factory. It is estimated that smart factories teleworking capabilities and more. Digital platforms will have delivered over $500 billion in value, and have been a lifeline to restaurant owners who saw their increased overall manufacturing productivity by non-delivery sales vanish during lockdowns. Market a factor of seven, over the past five years. Their estimates suggest that the food delivery industry is potential is enhanced by 3D technologies such as set to double its 2018 value of $85 billion by 2025. 3D printing, 3D visualization and 3D configuration. Moreover, the OECD reports that digitalization is “the These digital innovations are changing how products key strategic means” for SMEs to reach international are designed, manufactured, used and serviced. markets by lowering trade costs and easing access Mass production is shifting to mass customization. across borders. There is substantial opportunity Product-based manufacturing models are through further internationalization. According to increasingly complemented by product-as-a-service Eurostat, less than half of small businesses with models. Extended trade-in-task supply chains are e-commerce sales sell in other EU countries and an evolving into smarter, connected and more resilient even lower share sell outside of the EU. A similar trend systems. Lower-cost countries, such as China, are no can be observed for medium-sized firms selling via longer the automatic first choice for manufacturing e-commerce: half sell in other EU countries and less facilities, as producers build capacities closer to than a third sell outside of the EU.11 their customers and seek to avoid bottlenecks and chokepoints.14 Third, the pandemic accelerated an ongoing transformation in the way people spend and move Entering the Bio-Cognitive Age their money. More than 40% of the world’s adult population uses the Internet to pay bills or shop Even as we grapple with the advances and challenges online.12 FinTech, a combination of technology and of the “Digital Age,” some pathfinders are already financial services, holds promise for deploying funds charting new revolutionary advances in quantum more nimbly to places and people in need. The physics, biology, nanotechnology, behavioral and consumer-oriented FinTech market alone is expected cognitive sciences and artificial intelligence (AI).15 to reach $11.2 trillion in transaction value by 2024. In previous surveys we used Table 1 to herald the Digital payments account for the largest segment of possibilities. Now we are able to give this chart that market, with a transaction value of $4.9 trillion in greater detail, as this new age has already arrived, 2020 that is expected to reach $8.4 trillion by 2024. due to scientific breakthroughs and to the cascading China and the United States lead this market, with changes wrought by the pandemic. New industries Europe struggling. For instance, while cash is still are appearing, led by pioneering companies on both king in Germany, mobile payments in China (such sides of the Atlantic. as Alipay and WeChat Pay) have already all but replaced cash.13

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Table 1 The Expanding Digital Frontier

TECHNOLOGIES BIO-COGNITIVE AGE: bio-informatics, synthetic NOVEL MATERIALS HEALTHCARE BIO- Impact: biology, “omics,” (e.g. Tandem (e.g. BioNTech, MANUFACTURING PRECISION from economic telemedicine, cognitive Repeat, Zymergen, Amyris, Imagene (e.g. Kraig Biocraft, INDUSTRIES to biological commerce, augmented Altrika Box, Velo Labs, Babylon, Bolt Threads, (e.g. Trace and cognitive reality, remote intelligence, 3D, Novamont) Atomwise, Hello Inspidere, AmSilk, Genomics, Inori, transformation telerobotics Better, Benevolent Seevix) Flow Health, AI) Codexis)

DIGITIZATION AGE: smart devices and GOODS SERVICES PROPERTY sensors, IOT, big (e.g. Kijiji, (e.g. Deliveroo, (e.g. AirBnB, data, AI, 5G, platform Gumtree) TaskRabbit) Buzzmove) economy GENE-EDITING Impact: (e.g. Caribou Biosciences, from limited business CRISPR Therapeutics, and personal impact Pairwise, Editas Medicine) to transformation of all economic sectors SMARTPHONE AGE: smartphones, APIs, social media, apps Impact: TRANSPORTATION BIOLOGICAL digital advertising and (e.g. Uber, PLATFORMS marketing, multiple devices autonomous (e.g. Ginkgo Bioworks, per person, individuals as vehicles, BlaBlaCar) Ferment Consortium, content creators Mammoth Biosciences)

INFORMATION AGE: mobile phones, laptops, 2G/3G, GPS, WiFi Impact: remote work, FINANCIAL BIOPRINTING connected anytime SERVICES (e.g. Cellbricks, and everywhere (e.g. Kickstarter, Labnatek, Cellenion, TransferWise) Foldlink, Nanofiber Solutions)

PC AGE: Impact: Desktop and personal e-commerce, OTHERS ENERGY computing, PC software, e-mail, chat, healthcare, (e.g. Tesla, Solazyme, Internet technologies efficiency, education, energy, Novozymes, Fulcrum automated manufacturing, Bioenergy, Orsted, business utilities (e.g. MOOCs, Iberdrola) processes Mendeley, Firstbeat) TIME 1980s-1990 1990s-2000 2000s-2010 2010s-2020 2020s-Future

Sources: GSMA Intelligence; McKinsey Global Institute; Author’s own estimates

The pandemic has been a major accelerant of the Synthetic biology, a field that uses biology as biological revolution. The pace of scientific research a manufacturing platform, has emerged as a into SARS-CoV-2 has been extraordinary, even when foundational element of the $4 trillion bioeconomy. compared to the work that accompanied the SARS The market for goods and services related to epidemic in 2002–03. Scientists mapped the virus synthetic biology is expected to reach $15 billion by genome in weeks rather than months. Less than six 2025. McKinsey estimates that insights derived from months after the discovery of the virus, 161 vaccine biological data could account for more than half and therapy candidates were in the research-and- of economic potential in the next decade. Looking development pipeline. Now multiple vaccines are farther out, it suggests that as much as 60% of the available and many more are in development. The physical inputs to the global economy could, in breakthrough of successful mRNA vaccines promises principle, be produced biologically. Attaining that full to pave the way for a new generation of products.16 potential is a long way off, yet even modest progress could transform economies, societies, and our lives, By 2025, 40% of the datasphere will be in health – including what we eat and wear, the medicines we the largest of any sector or industry. This explosion take, the fuels we use, and how we construct our of genetic and health data – and increasing abilities physical world.18 to process it – hold significant potential for scientific and medical achievement worldwide. Telemedicine, Changing the Nature of Trade telepresence, and telesurgery are transforming medical techniques and generating greater cross- Digitalization is not just changing the scale, scope border trade in healthcare services.17 and speed of trade, it is changing its very nature.

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Many services sectors that were once non-tradable Digital Globalization: Still Uneven – because they had to be delivered face-to-face – have become highly tradable – because they can “Digital globalization” evokes the image of a seamless now be delivered over long distances.19 Digitalization global marketplace in which unbridled data flows even blurs the distinction between trade in goods drive goods, services and money across national and services. Automakers are now also services boundaries without friction. Reality is different. providers; online retailers are now also manufacturers. Digital connections are “thicker” between some 3D-printing generates products that are a mix of continents and “thinner” between others – and they goods and services.20 Digitalization increases the are “thickest” between the United States and Europe. importance of data flows and intellectual property. Researchers and firms on each side of the Atlantic It has boosted trade in software design over trade have been the vanguard of the digital economy. The in final products.21 It offers alternative means of transatlantic region is the fulcrum of global digital payment and finance. It has lowered shipping and connectivity. North America and Europe generate customs processing times and reduced the cost of approximately 75% of digital content for internet creating, copying and accessing text, video content users worldwide. U.S. and European cities (Frankfurt, and music, while enhancing our ability to access London, Amsterdam, Paris, Stockholm, Miami, goods and services without owning them.22 Marseille, New York) represent the world’s foremost hubs for international communication and data How Prepared are Europe and exchange.24 the United States for Digital Transformation? Our understanding of the full impact of the digital economy is limited by our inability to measure it. The 2020 Network Readiness Index measures how Not only is there is no widely accepted definition of prepared countries are to leverage the opportunities the digital economy, governments simply don’t have offered by technological innovation. It does so by good data about data. In addition, while many digital looking at the state of technology infrastructure, the services are considered “free,” they clearly have ability of individuals, businesses and governments to value to both producer and consumer. This value is use information and communications technologies difficult to calculate and none of this is counted in (ICT) productively, how conducive the national official economic measures.25 TIME environment is for a country’s participation in the network economy, and the economic, social, and Failing standard measurements, we have devised human impact of a country’s participation in the five metrics through which we can see more clearly network economy. Based on these metrics, Europe the importance of transatlantic digital connections. and the United States represent nine of the top ten These metrics are not mutually exclusive; they are countries in the world when it comes to technology better understood as different lenses through which readiness and adoption (Table 2). Singapore was the one can better understand the transatlantic digital lone Asian country in the top ten. The Republic of economy. Korea ranked 14th, Japan 15th, and China 40th.23

Table 2. Top Ten Network-Ready Countries, 2020

Country NRI Rank Technology People Governance Impact

Sweden 1 2 4 4 3 Denmark 2 5 1 2 5 Singapore 3 10 5 13 1 Netherlands 4 3 9 3 4 Switzerland 5 1 13 10 2 Finland 6 9 3 5 9 Norway 7 11 8 1 6 United States 8 4 7 8 14 Germany 9 7 12 12 7 United Kingdom 10 8 14 14 10

Source: Soumitra Dutta and Bruno Lanvin, eds., The Network Readiness Index 2020: Accelerating Digital Transformation in a post-COVID Global Economy (Washington, DC: Portulans Institute, 2020), https://networkreadinessindex.org/wp-content/uploads/2020/10/NRI- 2020-Final-Report-October2020.pdf.

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1. Digital Services and Digitally-Enabled Services Digitally-enabled services are not just exported directly, they are used in manufacturing and to The digital economy is dominated by services, produce goods and services for export. Over half which accounted for over 90% of total U.S. digital of digitally-enabled services imported by the economy current-dollar value added in 2017.26 Two United States from the European Union is used to metrics offer us a clearer picture of transatlantic produce U.S. products for export, and vice versa, connections in digital services. A narrow view can thus generating an additional value-added effect be had by looking at cross-border ICT services, or on trade that is not easily captured in standard digital services as shorthand, which are services metrics.33 According to the OECD, the top global used to facilitate information processing and hubs for imports and exports of digitally deliverable communication.27 A broader view can be taken by services are the United States, Germany, Ireland, the looking at digitally-enabled services: services that Netherlands, France and the UK.34 can be, but not necessarily are, delivered remotely over ICT networks. These include digital services as In 2019, digitally-enabled services accounted for well as “activities that can be specified, performed, 59% of all U.S. services exports, 50% of all services delivered, evaluated and consumed electronically.”28 imports, and 76% of the U.S. global surplus in trade Identifying potentially ICT-enabled services does in services (Table 7). not tell us with certainty whether the services are actually traded digitally.29 But the U.S. Commerce In 2019 the United States registered a $219.9 billion Department notes that “these service categories trade surplus in digitally-enabled services with the are the ones in which digital technologies present world. Its main commercial partner was Europe, the most opportunity to transform the relationship to which it exported over $245 billion in digitally- between buyer and seller from the traditional in- enabled services and from which it imported an person delivery mode to a digital one,”30 which estimated $133 billion, generating a trade surplus with means a digital transaction is likely and thus can offer Europe in this area of over $112 billion. U.S. exports a rough indication of the potential for digital trade.31 of digitally-enabled services to Europe were about 2.7 times greater than U.S. digitally-enabled services In 2018, the latest year of available data, digitally- exports to Latin America, and roughly double U.S. enabled services exports amounted to $2.9 trillion, digitally-enabled services exports to the entire Asia- half of total global services exports. Business Pacific region (Table 3). services exports were by far the largest category, with a global value of $1.2 trillion.32

Table 3 U.S. Trade in Digitally-Enabled Services by Major Area, 2019 ($Billions)

245.7 250250

200200

150150 132.9 124.1

100 100 90.7 79.9

56.3 5050 38.5

18.8 18.1 9.7 00 Canada Europe* Latin America Africa and Asia and Pacific* and Other Western the Middle East n Exports n Imports Hemisphere *Europe imports of ICT are author's estimates. Actual data for ICT imports in 2019 have been suppressed to avoid disclosure of individual company data. Source: Bureau of Economic Analysis, Trade in Potentially ICT-Enabled Services Database. Data as of July 2020.

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The 27 EU member states collectively exported ¤1.1 purchased €130 billion, according to Eurostat data trillion in digitally-enabled services to countries both for 2019, making it one of the largest consumers of inside and outside the EU in 2019.35 EU27 imports EU digitally-enabled services exports. of digitally-enabled services were also ¤1.1 trillion in 2019. Excluding intra-EU trade, EU member states European countries with the largest estimated value exported ¤585 billion and imported ¤622 billion in of digitally-enabled services exports were the UK digitally-enabled services, resulting in a deficit of ¤37 (¤261 billion), Ireland (¤177 billion), Germany (¤173 billion for these services (See Table 3 and Table 4). billion), and the Netherlands (¤160 billion).

Digitally-enabled services represented 55% of all EU On the other side of the equation, EU27 member services exports to non-EU countries and 63% of all states imported ¤1.1 trillion in digitally-enabled EU services imports from non-EU countries. services, according to 2019 data from Eurostat. 42% originated from other EU27 member states (See In 2019 the United States accounted for 22% of the Table 4). Another 16% (¤167 billion) came from the EU27’s digitally-enabled services exports to non-EU United States – making it the largest supplier of countries, and 27% of EU digitally-enabled services these services – and 11% came from the UK. imports from non-EU countries.36 The United States

Table 4 Destination of EU27 Exports of Digitally- Table 5 Origin of EU27 Imports of Digitally- Enabled Services, 2019 (¤Billions) Enabled Services, 2019 (¤Billions)

European Union 485.7 European Union 447.6 (27 countries) (27 countries)

Other Europe Other Europe (excluding 216.4 (excluding 181.4 EU27) EU27)

United States 129.9 United States 167.2

Other Americas Other Americas 45.5 161.1 (excluding U.S.) (excluding U.S.)

Asia and Asia and 150.0 76.4 Oceania Oceania 25.0 8.1

Africa 17.3 Africa 0.4

International International 2.6 Organizations Organizations 0.5

00 100 100200 300200 400 300500 600400700 800500 0 100 200 300 400400 500500

Note: Digitally-Enabled Services includes finance; insurance; IP charges; telecommunications, computer, information services; R&D services; professional and managemet services; architectural, engineering, scientific and other techhnical services; and select other business services. Asia includes Middle East countries. Data on EU28 exports and imports of services by product is not available from Eurostat for the year 2019. Source: Eurostat. Data as of March 2021.

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Table 6 categorizes U.S.-EU digitally-enabled Digitally-Enabled Services Supplied Through Foreign services trade into five sectors. For both economies, Affiliates the most important exports are represented by business, professional and technical services, which The digital economy has transformed the way trade accounted for 43% of digitally-enabled services in both goods and services is conducted across exports from the EU to the United States and 44% the Atlantic and around the world. Even more of digitally-enabled services exports from the United important, however, is the delivery of digital services States to the EU in 2019. The second most important by U.S. and European foreign affiliates – another category consists of intellectual property, including indicator reinforcing the importance of foreign direct royalties and license fees, most of which are paid on investment, rather than trade, as the major driver of industrial processes and software, underscoring how transatlantic commerce. U.S. services supplied by integral such transatlantic inputs are to production affiliates abroad were $1.704 trillion, roughly double processes in each economy.37 Financial services global U.S. services exports of $875.83 billion. comprise the third largest digitally-enabled services Moreover, half of all services supplied by U.S. affiliates export category. abroad are digitally-enabled (Table 7).

Table 7 underscores the relative importance of Table 6 U.S.-EU Digitally Enabled Services Trade by digitally-enabled services supplied by affiliates of Sector, 2019 U.S. companies located in Europe and affiliates of European companies in the United States, versus % 100 100 U.S. and European exports of digitally-enabled

90 services. 52% of the $938 billion in services provided in Europe by U.S. affiliates in 2018 was digitally- 8080 enabled. In 2018 U.S. affiliates in Europe supplied 44% 43% $490.51 billion in digitally-enabled services, whereas 70 European affiliates in the United States supplied 6060 $273.78 billion in digitally-enabled services. Digitally- enabled services supplied by U.S. affiliates in Europe 50 9% 12% were almost double U.S. digitally-enabled exports to Europe, and digitally-enabled services supplied 4040 19% 26% by European affiliates in the United States were 30 double European digitally-enabled exports to the United States. 20 20 15%

10 20% 12% 00 2%

U.S. Exports to the EU EU Exports to the U.S.

n Business, Professional and Technical Services n Telecommunications, Computer and Information Services n Charges for Use of Intellectual Property n Financial Services n Insurance Services

Share of Business, Professional and Technical Services in EU exports is based on authors' estimates. Data had been supressed to avoid disclosure of individual company data. Sources: U.S. Bureau of Economic Analysis. Data as of July 2020.

Digitally-enabled services supplied by affiliates (2018) $490 billion $274 billion U.S. affiliates in European affiliates Europe in the U.S.

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Table 7 Digitally-Enabled Services Trade and Services Supplied through Affiliates* ($Billions)

18001,800

16001,600

14001,400

12001,200

10001,000

800

600

400

200200

00

U.S. Services U.S. Services U.S. Services Foreign U.S. Services U.S. Services Services Services Exports Imports Supplied Services Exports to Imports from Supplied by Supplied by Through Supplied Europe Europe U.S. Affiliates in European Foreign Through Europe Affiliates in the Affiliates Affiliates in the U.S. U.S. n Digitally Deliverable n Other Services

*Trade data are for 2019. Affiliate data are for 2018, the latest available year. Source: U.S. Bureau of Economic Analysis. Data as of October 2020.

The significant presence of leading U.S. service and of U.S. firms throughout Europe, with outward U.S. technology leaders in Europe underscores Europe’s FDI stock in information overwhelmingly positioned position as the major market for U.S. digital goods in Europe. U.S. overseas direct investment in the and services. Table 8 underscores this dynamic. “information” industry in the UK alone, for instance, In 2018, Europe accounted for 69% of the $289.6 was more than double such investment in the entire billion in total global information services supplied Western Hemisphere outside the United States, and abroad by U.S. multinational corporations through 33 times such investment in China. Equivalent U.S. their majority-owned foreign affiliates. This is not investment in Germany was four times more than in surprising given the massive in-country presence China.38

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Table 8 Information Services Supplied Abroad by U.S. Multinational Corporations through their MOFAs ($Millions)

Country 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Canada 3,595 4,140 3,971 5,996 6,316 7,135 7,595 7,401 8,487 8,342 9,161 8,991 9,454 Europe 67,270 76,156 85,450 84,117 96,310 110,525 119,123 120,796 157,811 162,409 175,105 174,396 201,161 France 4,045 3,794 4,475 4,713 4,582 5,013 4,768 5,258 6,085 5,894 5,927 6,265 6,989 Germany 5,260 6,031 6,104 6,456 7,143 7,798 7,970 10,599 12,018 11,191 11,394 12,589 13,517 Netherlands 5,925 8,152 9,980 8,674 8,719 9,313 10,196 9,117 12,686 13,590 13,938 16,617 19,667 Switzerland 2,871 2,527 3,197 3,747 4,034 4,419 5,243 4,778 (D) 5,452 5,435 5,404 5,728 United 33,512 35,711 31,479 29,906 24,941 26,446 25,996 23,876 30,228 33,512 35,854 37,684 38,268 Kingdom Latin America and Other 7,255 10,845 13,165 13,798 17,578 20,943 21,887 21,751 22,457 20,672 20,320 21,698 23,272 Western Hemisphere Australia 5,722 6,365 6,369 5,961 6,852 6,960 5,531 7,735 7,045 6,266 6,431 7,018 8,349 Japan 3,447 (D) 6,224 7,856 4,575 4,828 5,204 5,807 7,796 7,821 11,252 9,856 11,378 China n/a n/a n/a 1,252 1,633 1,627 1,581 1,656 3,016 2,675 2,726 3,250 3,599 Other Asia- Pacific 5,217 (D) (D) 7,623 8,582 10,320 11,663 14,226 33,461 36,891 36,293 30,498 32,416 and MENA Countries TOTAL 92,507 (D) (D) 126,603 141,846 162,338 172,583 179,372 240,073 245,076 261,288 255,707 289,629

MOFA: Majority-owned foreign affiliate. (D) indicates that the data in the cell have been suppressed to avoid disclosure of data of individual companies. Source: Bureau of Economic Analysis.

2. E-Commerce e-commerce sales broken down by mode; official statistics on e-commerce are sparse and usually Electronic commerce offers a second window into based on surveys rather than on real data.41 transatlantic digital connections and complements our lens of digitally-enabled services. E-commerce, Nonetheless, we can evaluate and compare which had already been registering double-digit many different estimates and surveys that have growth in recent years, simply skyrocketed during been conducted. According to UNCTAD, global the pandemic, generating what The Economist called e-commerce was worth $25.6 trillion in 2018 – “the biggest shopping revolution in the West since equivalent to 30% of global gross domestic product.42 malls and supermarkets conquered suburbia 50 years ago.”39 Online shopping for food and personal When most people hear the term “e-commerce,” they care exceeded $400 billion in revenues in 2020, up think of consumers buying things from businesses via by more than 40% from 2019. Other sectors took a websites, social networks, crowdsourcing platforms, hit, however: online revenues for travel, mobility and or mobile apps. These business-to-consumer accommodation slumped by more than 50%, a drop transactions (B2C), however, pale in comparison to of well over half a trillion dollars in annual consumer business-to-business (B2B) e-commerce. In 2018 spending.40 B2B e-commerce accounted for 83% ($21 trillion) of the total value of global e-commerce, almost When exploring the importance of e-commerce for five times larger than business-to-consumer (B2C) the transatlantic economy, we again run into some transactions ($4.4 trillion).43 definitional and data challenges. Most estimates of e-commerce do not distinguish whether such While B2B e-commerce accounts for the bulk of commerce is domestic or international. In addition, global e-commerce, most B2B e-commerce does many metrics do not make it clear whether they not cross a border. Most B2B e-commerce users are cover all modes of e-commerce or only the leading manufacturers or wholesalers who are dependent on indicators of business-to-business (B2B) and physically moving goods, and often heavy freight; business-to-consumer (B2C) e-commerce. Finally, the lack of freight digitalization ultimately poses a there are no official data on the value of cross-border barrier to cross-border B2B e-commerce. The sheer

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volume of B2B e-commerce, however, means it still however, when it comes to B2B e-commerce. China’s is the most important component of cross-border e-commerce activities as a share of GDP (17%) are e-commerce sales. By 2023 cross-border B2B also the lowest among the world’s top e-commerce commerce is expected to account for two-thirds countries. ($1.78 trillion) and cross-border B2C commerce for one-third ($920 billion) of an overall global cross- When it comes to cross-border B2C e-commerce border e-commerce market of $2.7 trillion.44 sales, China and the United States lead in terms of total value, but the UK leads in terms of B2C e-commerce Including all types of e-commerce, the United States as a share of overall goods exports (8.2%) and overall is the top market in the world; online sales there are B2C e-commerce sales (15%) (Table 10). Germany, 2.6 times higher than in Japan and 3.8 times higher France and Italy also record higher shares of cross- than in China. North America and Europe account border sales as a share of overall B2C e-commerce for six of the top 10 e-commerce countries (Table 9). activities. For some smaller European countries, the China has the largest number of internet buyers at shares are even higher, for instance Belgium (30%), 610 million; its large B2C e-commerce market reflects Ireland (27%), and Austria (18%).45 its billion-plus population. China is underweight,

Table 9. Top 10 Countries by E-Commerce Sales

Rank Economy Total As % of GDP B2B %) of all B2C ($ billion) ($ billion) e-commerce ($ billion)

1 United States 8,640 42 7,542 87 1,098 2 Japan 3,280 66 3,117 95 163 3 China 2,304 17 943 41 1,361 4 Korea (Rep.) 1,364 84 1,263 93 102 5 United Kingdom 918 32 652 71 266 6 France 807 29 687 85 121 7 Germany 722 18 620 86 101 8 Italy 394 19 362 92 32 9 Australia 348 24 326 94 21 10 Spain 333 23 261 78 72 Top 10 Total 19,110 35 15,772 83 3,338 World 25,648 30 21,258 $4,390

Source: UNCTAD. Data for 2018, latest available. B2B: Business-to-Business. B2C: Business-to-Consumer. .

Table 10. Cross-Border B2C Sales of Top Ten Merchandise Exporters

Rank Economy Total ($ billion) As % of merchandise % of B2C exports 1 China 100 4.0 7.3 2 United States 85 5.1 7.8 3 United Kingdom 40 8.2 15.0 4 Hong Kong 35 6.2 13.1 5 Japan 21 2.9 12.2 6 Germany 15 1.0 14.9 7 France 12 2.0 10.6 8 Italy 4 0.8 13.9 9 Korea (Rep.) 3 0.5 3.2 10 Netherlands 1 0.2 4.4 Top 10 Total 317 3.2 9.6 World 404 2.1

Source: UNCTAD. Data for 2018, latest available B2C: Business-to-Consumer.

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3. The Platform Economy of industry. Countries with a strong industrial base, such as Germany, stand to profit. Platform companies that connect individuals and companies directly to each other to trade products and Platforms have also supercharged consumer-to- services continue to reshape the U.S. and European consumer (C2C) e-commerce (also known as peer- economies, as well as the commercial connections to-peer or P2P e-commerce), such as online distance between them. Platforms have swiftly become a work, music and video streaming, medical equipment prominent business model in the transatlantic digital and healthcare, retail, legal services, human resources economy, both by matching supply and demand and food delivery. At the same time, in 2020 the in real time and at unprecedented scale, and by pandemic disrupted key segments of this model, connecting code and content producers to develop such as home and car sharing. applications and software such as operating systems or technology standards.46 The total market value attributed to platform economics was estimated at $7 trillion in late 2018. The OECD reports that the COVID-19 pandemic has It is projected to expand to around $60 trillion by caused a surge in the use of online platforms in OECD 2025, or nearly one-third of all global commerce. and G20 countries, but that this surge has been very uneven across sectors and countries. Online U.S. companies are leading platforms, although platforms in areas where activities could be pursued they are not alone. Next are firms from China, like without physical proximity (e.g. mobile payments, Alibaba’s AliExpress, which is among the fastest online marketplaces, restaurant delivery) saw a rise growing online marketplaces in Europe. European in traffic above 20%. In other areas, however, where companies account for a marginal share of the market physical proximity is needed to consume the service capitalization of the world’s top digital platforms, being provided (e.g. accommodation, restaurant and on average they are markedly smaller than booking and transport), platform use declined their U.S. and Chinese counterparts (Table 11). This sharply (-70%). The uneven use of online platforms is causing considerable anxiety in European capitals across countries and regions is also a result of that Europe is missing the platform revolution. differences in access to digital infrastructure.47 Despite the EU’s effort to create a Digital Single According to Forrester, online marketplaces will Market, the European market remains relatively account for 67% of global e-commerce sales by fragmented in terms of languages, consumer 2022.48 While they have become known primarily preferences and rules and regulations, which makes for business-to-consumer (B2C) e-commerce, they it much harder to achieve the kind of scale that are beginning to impact the far larger business- platform companies have achieved in the large to-business (B2B) e-commerce market. Digital continental markets of the United States or China. B2B platforms are likely to transform the Industrial There is also a more risk-averse culture that makes Internet of Things (IIoT) by rendering data and it generally harder to secure funding for potentially information from countless sensors and smart chancy bets on unproven technologies.49 devices usable, thus accelerating the digitalization

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Table 11 Geographical Distribution of the Top Global Platforms. Based on MarketCap/last-known venture round valuation. Overall top 100 value $12.6 trillion. (October 2020)

America

In U

G A

Microsoft Amazon Apple

Tw M

D E Te Ch Sq Bo Facebook Netflix PayPal St Alphabet Ca Pi Sl Ex I Me Sales Z Gr C Pe force Do Ly Sn Eb Wi Ai Wi W Sp Ro T Airbnb Chegg Expedia Lyft Pinterest Square Wikipedia Alteryx Doordash Grainger Match Roku Stripe Wish Booking Dropbox Grubhub MercadoLibre Slack Teladoc Zillow Carvana Ebay lnstacart Uber Snap Twilio Compass Etsy Intuit Peloton Splunk Twitter

Europe Asia-Pacific AG R R K Ma K Ka S Ra SAP H Wb A Go Samsung Ad J Ch De Y Alibaba Tencent Y E F M J T BY Byte- Adevinta Edenred Revolut Ch dance C Adyen Hellofresh Spotify W Ant Group Autotrader G. Farfetch Just Eat T. Z PingAn L Didi Delivery Hero Klarna Yandex B Pi Mei JD. Ne S JDD N Ne com Ba Sea Tr O OyYo Bi P T Gr We V Me PH Africa Baidu JD Digits Netease Sensetime Beike Joyy Ola Tokopedia Bilibili Kakao OYO Trip.com BYJU Kuaishou Paytm VipShop Nas Chehaoduo Lufax Pinduoduo WeBank pers Prosus Coupang Manbang PingAn Health WeOoctor Didi Chuxing Meicai Rakuten Weibo Go-Jek Meituan Rea YonYou Grab Naver Sea Group

Value of top 100 66 3 2 29 platforms (%) America Europe Africa Asia-Pacific No. of top 100 platforms (%) 41 12 2 45 America Europe Africa Asia-Pacific

Sources: UNCTAD; Holger Schmidt, Hamidreza Hosseini, https://www.netzoekonom.de/plattform-oekonomie/. © Copyright 2021 Dr. Holger Schmidt I Hamidreza Hosseini Netzoekonom.de I TU Darmstadt I Ecodynamics.io I Platform-Index.com

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Online marketplaces generated 59% ($94 billion) For most of the history of the Internet, transatlantic of the overall cross-border e-commerce market flows of data were the fastest and largest in the turnover of $160 billion in the EU and UK in 2019. world.52 That dominance is dissipating, however, as U.S. platform companies accounted for six of the data flows diffuse and as companies face significant top ten marketplaces in Europe; Amazon accounted and growing legal uncertainty in transferring for a quarter of the market. Marketplaces with personal information out of the European Union. European capital, led by Vinted, G2A, Farfetch and In July 2020 the Court of Justice of the European Zalando, represented 11% of the market (Table 12). In Union invalidated the Privacy Shield framework that our 2020 report we offered examples of successful enabled over 5,000 mostly small- and medium- European cross-border marketplaces that show how sized enterprises to transfer personal data for companies can achieve success even from relatively commercial purposes. The Court and European small home economies. It is expected that in 2025, privacy regulators have raised concerning questions marketplaces will represent 65% of cross-border about other data transfer tools, including standard online sales in Europe.50 contractual clauses, which are used by the majority of companies sending personal information out of Table 12 Top Ten Cross-Border Marketplaces Europe.53 This re-opened transatlantic disputes over Operating in Europe privacy protections, disrupted transatlantic data flows, and further chilled the transatlantic economy, as prominent European officials called explicitly for 1. Amazon (US) data localization.54 2. eBay (US) 3. AliExpress (China) According to Nikkei, the Chinese mainland and 4. Etsy (US) Hong Kong, the telecommunications gateway to the mainland, together account for 23% of the world’s 5. Discogs (US) data.55 That is almost double that of the United States 6. Wish (US) (Table 13). In part because of China’s burgeoning 7. Vinted (Lithuania) mobile payments platforms and its Belt and Road 8. G2A (Poland) infrastructure initiatives, Chinese data flows are growing substantially with other Asian countries, 9. Farfetch (UK) which accounted for more than half of data flows in 10. Bandcamp (US) and out of China in 2019. The U.S. share of data flows in and out of China fell from 45% in 2001 to 25% in Source: Cross-Border Commerce Europe, “Top 100 Cross- Border Marketplaces Europe. An Annual Analysis of the Best 2019. Global Cross-Border Platforms Operating in Europe, EU 28 Including UK,” September 24, 2020, https://www.cbcommerce. eu/press-releases/press-release-top-100-cross-border- Table 13 Countries with the Most Cross-Border Data, marketplaces-europe-an-annual-analysis-of-the-best-global- 2001-2019 cross-border-platforms-operating-in-europe-eu-28-including- uk/. 2001 Rank 2019 4. Cross-Border Data Flows United States 1 China/Hong Kong United Kingdom 2 United States Another way to understand transatlantic digital connections is to appreciate the role of cross-border Germany 3 United Kingdom data flows, which not only contribute more to global France 4 India growth than global trade in goods, they underpin Japan 5 Singapore and enable virtually every other kind of cross-border China/Hong Kong 6 Brazil flow. By the end of this year, cross-border bandwidth is slated to be 400 times what it was in 2005. By that Brazil 7 Vietnam time, global Internet Protocol (IP) traffic, a proxy for Russia 8 Russia data flows, is projected to reach 150,700 gigabytes Singapore 9 Germany (GB) per second, over 3 times more than three years ago.51 India 10 France

Source: Nikkei Asia, November 25, 2020, https://vdata.nikkei. com/en/newsgraphics/splinternet/.

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Global data flows Table 14 International Trade Underpinned by Data now contribute Flows, Top Countries ($Billions) more to global growth than U.S. global trade in Ireland goods

Germany

Data flows are not necessarily a proxy for commercial links, since data traffic is not always related to Netherlands commercial transactions.56 Knowing the volume of data flows does not necessarily provide insight on France the economic value of their content. The Bureau of Economic Analysis puts it succinctly: “Streaming a Switzerland video might be of relatively little monetary value but use several gigabytes of data, while a financial transaction could be worth millions of dollars but use Sweden little data.”57 0 100100 200200 300300 400400 500500 600600 700700 800800

In addition, commercial transactions do not always n Exports n Imports accompany data, and data do not always accompany commercial transactions. For instance, multinational Note: Trade underpinned by data flows includes four categories: companies often send valuable, but non-monetized, (1) "ISIC J production”, or trade in products produced by firms classified in ISIC section J (Information and Communication); data to their affiliates.58 User-generated content on (2) “ISIC J products,” or trade in the products mainly associated blogs and on YouTube drives very high volumes with firms classified in ISIC section J but including production by firms classified in other sectors; (3) “Digitally deliverable of internet traffic both within countries and across services," or “potentially ICT-enabled products” per UNCTAD borders, but consumers pay for very little of this (2015); and (4) “Digitisable products,” or products within the content. Since it does not involve a monetary WTO HS commodity classification per Banga (2019). UK is not included due to differing data calculations, but OECD indicates transaction, the significant value that this content the UK also ranks among the top traders in this category. generates does not show up in economic or trade Source: OECD, Perpectives on the Value of Data and Data Flows, December 2020. statistics but instead reveals itself as “consumer surplus.” McKinsey estimates that this “consumer surplus” from the United States and Europe alone is 5. Digital Hubs and Spokes: The Hardware of the close to €250 billion ($266.4 billion) each year.59 Transatlantic Digital Economy61

In other words, data flows are commercially Kleyerstrasse 90 is the address of an unassuming significant, yet their extent, as well as their five-story building in Frankfurt am Main, Germany. commercial value, are hard to measure and are in It is also the busiest network node in the world, a constant flux. The OECD has devised metrics to “carrier hotel” data center where California-based determine the most active countries when it comes Equinix rents equipment, space, and bandwidth to to delivering products across borders through data customers connected to every continent.62 flows, as opposed to considering all transactions facilitated through data flows. It has determined that Kleyerstrasse 90 is emblematic of the role that the United States is a major hub for international European and U.S. cities play as major cross- trade in products delivered through data flows, and border digital hubs. Europe is the global leader, that France, Germany, India, Ireland, the Netherlands, with tremendous connected international capacity. Switzerland, and the United Kingdom also feature Frankfurt, London, Amsterdam and Paris substantially heavily in trade underpinned by data, all ahead of outpace North American and Asian cities (Table 15). China.60 Frankfurt's connected capacity, for instance, is over

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three times greater than that of Los Angeles and The EU is building out its subsea cable infrastructure. almost five times greater than that of Singapore, the The Ella Link from Sima, Portugal to Fortaleza, Asian leader. Marseille, France has become a major Brazil, is slated to come online in the first half of this hub for traffic between Europe, Africa and the Middle year. Portugal is using its term at the helm of the East. The United States accounts for about 40% and European Council in the first half of 2021 to push for Europe for an additional 35% of so-called colocation a pan-European investment plan to roll out additional data centers. Each hosts more data centers than Asia, submarine data connections in the Mediterranean, the Africa, the Middle East and Latin America combined.63 North Sea, and with other continents. The initiative is prompted in part to alleviate potential chokepoints Table 15 Highest Capacity International Internet Hub when it comes to European reliance on transcontinental Cities data flows. A good deal of data to and from the United States from Europe, for instance, traverses the UK first. With the UK no longer in the EU, some are concerned City 2020 Bandwidth that data flows could be subjected to additional legal (Tbps) restrictions. European connections to East Africa and Frankfurt, Germany 110.6 Asia rely almost exclusively on cables crossing Egypt London, UK 74.8 and the Red Sea, giving Telecom Egypt significant leverage in global data traffic that could be reduced Amsterdam, Netherlands 71.2 via new cable routes. European interest in greater Paris, France 67.9 diversification is also prompted by concerns about Singapore, Singapore 56.3 undue reliance on Chinese carriers and the need to Hong Kong, China 33.8 address the potential susceptibility of Europe’s subsea networks to cyberespionage and interference.68 Stockholm, Sweden 32.0

Miami, U.S. 30.9 The new surge in transatlantic capacity, however, is Marseille, France 28.8 being driven by private networks, mainly providers Los Angeles, U.S. 25.2 of content and cloud services, which have displaced national telecommunication carriers as the major Domestic routes omitted. investors in subsea cables and the largest source Source: Telegeography, The State of the Network 2021, https:// of used international bandwidth. Content providers www2.telegeography.com/hubfs/assets/Ebooks/state-of-the- network-2021.pdf. keen on getting closer to customers and achieving economies of scale are quickly pushing the digital These digital hubs are connected to digital spokes frontier. Rather than rely on leasing arrangements – the undersea fiber optic cables that transmit 95% with backbone providers, they see advantages in of all intercontinental telecommunication traffic.64 owning these cable networks themselves as they These cables serve as an additional proxy for the anticipate continuing massive growth in bandwidth ties that bind continents. They show clearly that the needs. Their densest connections are between North transatlantic data seaway is the busiest in the world. America and Europe. In 2006 backbone providers Submarine cables in the Atlantic already carry 55% accounted for over 80% of international bandwidth. more data than transpacific routes, and 40% more By 2019, content providers were accounting for data than between the United States and Latin 64% of used international bandwidth globally and a America. Telegeography estimates a compound whopping 90% on transatlantic routes.69 annual growth rate of 38% in transatlantic capacity until 2025. 8 new transatlantic cables will be needed Bypassing the Internet by 2027 just to keep up with expected increases in demand, compared to 4 for intra-Asian routes, 3 The rise of private content providers as drivers of for transpacific routes, and just one for U.S.-Latin submarine cable traffic is related to yet another American routes.65 Military agencies also build significant yet little understood phenomenon shaping submarine cables, yet those do not appear on public the transatlantic digital economy: more and more maps. Suffice it to say that if such connections are companies are working to bypass the public internet also considered, transatlantic submarine cables are as a place to do business in favor of private channels even more dense than commonly depicted.66 that can facilitate the direct electronic exchange of data among companies. Businesses are moving Demand for international bandwidth is doubling their computing from centralized data centers to every two years. All the stay-at-home activity more distributed locations. Analysts estimate that induced by COVID-19 boosted average international more than 50% of enterprise-generated data will internet traffic by 48%,67 although plans to build out be created and processed outside centralized data further submarine cable infrastructures lapsed, as centers or cloud by 2023.70 cable ships logged months of inactivity.

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This move is exponentially increasing demand for will see a three-year compound annual growth rate “interconnection” – private digital data exchange (CAGR) of 45%. This far exceeds the expected CAGR between businesses – and is another fundamental of global Internet traffic.72 driver behind the proliferation of transatlantic cable systems.71 It is unlikely that the public Internet is doomed, since it is such a pervasive force in most people’s lives and Private interconnection bandwidth is not only a key to digitally-delivered services, e-commerce and distinct from public internet traffic, it is slated to the platform economy. Yet private interconnection grow much more quickly and become much larger. is rising alongside the public Internet as a powerful Equinix projects that interconnection traffic – direct, vehicle for business. And as we have shown here, its private connections that bypass the public Internet – deepest links are across the Atlantic.73

Endnotes

1 Rana Foroohar, “Big Tech’s viral boom could be its undoing,” Financial Times, May 17, 2020; Richard Waters, “Lockdown has brought the digital future forward — but will we slip back?” Financial Times, May 1, 2020. 2 Gigi Gronvall, “Improving US-EU Effectiveness in Health and Health Security,” Woodrow Wilson Center, February 4, 2021, https://www.wilsoncenter.org/article/ improving-us-eu-effectiveness-health-and-health-security; “Creating the coronopticon,” The Economist, March 26, 2020. 3 Statistia, “Spending on digital transformation technologies and services worldwide from 2017 to 2023,” January 11, 2021, https://www.statista.com/statistics/870924/ worldwide-digital-transformation-market-size/#:~:text=Between%202020%20and%202023%20the,to%202.3%20trillion%20U.S.%20dollars; Ullrich Fichtner, “A Paradigm Shift Accelerated by the Coronavirus,” Der Spiegel, April 23, 2020, https://www.spiegel.de/international/world/dawn-of-a-new-era-a-paradigm-shift-accelerated-by-coronavirus-a-5b12ce13-625c-42fe-bd22-07b77c0c4321. 4 Arne Holst, “Volume of data/information created, captured, copied, and consumed worldwide from 2010 to 2024,” Statista, December 3, 2020, https://www. statista.com/statistics/871513/worldwide-data-created/. 5 There are significant differences between countries. GWI reports that Filipinos are the world’s biggest consumers of social media, spending an average of 4 hours and 15 minutes per day using social platforms. Users in Japan, in contrast, say they spend less than an hour a day on social media. See Simon Kemp, “Digital trends 2021: Every single stat marketers need to know,” the nextweb.com, January 27, 2021, https://thenextweb.com/podium/2021/01/27/insights-global-state- of-digital-social-media-2021/; App Annie, “State of Mobile 2021,” https://www.appannie.com/en/go/state-of-mobile-2021/. 6 See Ovidiu Vermesan and Peter Friess, eds., Digitising the Industry Internet of Things: Connecting the Physical, Digital and Virtual Worlds (Gistrup, Denmark, 2016), http://www.internet-of-things-research.eu/pdf/Digitising_the_Industry_IoT_IERC_2016_Cluster_eBook_978-87- 93379-82-4_P_Web.pdf. 7 Cisco, Internet of Things, At-a-Glance, https://www.cisco.com/c/dam/en/us/products/collateral/se/internet-of-things/at-aglance-c45-731471.pdf. 8 John Chambers, “The Internet of Everything: Let’s Get This Right,” Wired, December 14, 2012, https://www.wired.com/2012/12/the-internet-of-everything-lets-get- this-right/. 9 https://www.securityweek.com/eu-regulator-hackers-%E2%80%98manipulated%E2%80%99-stolen-vaccine-documents. 10 Digital Economy Compass 2020, Statista.com; ZDnet; Accenture, 2020 Cyber Threatscape Report, https://www.accenture.com/_acnmedia/PDF-136/Accenture- 2020-Cyber-Threatscape-Full-Report.pdf#zoom=50. 11 See OECD, The digital transformation of SMEs, February 3, 2021, https://www.oecd-ilibrary.org/industry-and-services/the-digital-transformation-of-smes_ bdb9256a-en; “The Soon To Be $200B Online Food Delivery Is Rapidly Changing The Global Food Industry,” Forbes, September 9, 2019, https://www.forbes.com/ sites/sarwantsingh/2019/09/09/the-soon-to-be-200b-online-food-delivery-is-rapidly-changing-the-global-food-industry/?sh=7a6f2eeeb1bc; Eurostat (2020), “Community survey on ICT usage and e-commerce in enterprises,” StatLink https://doi.org/10.1787/888934227564. 12 According to Gartner, businesses built on blockchain technology will be worth $10 billion by 2022. Subsequently, by 2026, the business value added by blockchain can grow to slightly over $360 billion dollars. “Blockchain: What’s ahead?” https://www.gartner.com/en/information-technology/insights/blockchain. 13 Digital Economy Compass 2020, Statista.com. 14 3D parts produced to address COVID-19 included nasopharyngeal swabs, face shields and circuit splitters. See Karen Queen, “Despite pandemic, manufacturers continue to invest in digital factory plans,” themanufacturer.com, October 29, 2020, https://www.themanufacturer.com/articles/despite-pandemic- manufacturers-continue-invest-digital-factory-plans; “In-depth: Industry 4.0 2020,” September 2020, Statista.com; “Digital factories 2020: Shaping the future of manufacturing,” PWC.de, https://www.pwc.de/de/digitale-transformation/digital-factories-2020-shaping-the-future-of-manufacturing.pdf; “Impact of Industry 4.0 in Global Manufacturing,” Globalluxsoft, https://globalluxsoft.com/impact-industry-4-in-global-manufacturing; Yahong Zhang, “Industry 4.0: what it is and how it will change the world as we know it,” Hapticmedia.fr, January 26, 2020, https://hapticmedia.fr/blog/en/industry-4.0/; Joshua Oliver, “How 3D printing will transform mass production,” Financial Times, October 6, 2019; Steven Ezell, “Why Manufacturing Digitalization Matters and How Countries Are Supporting It,” Information Technology and Innovation Foundation, April 2018, http://www2.itif.org/2018-manufacturing-digitalization.pdf; Louis Columbus, “Smart Factories Will Deliver $500B In Value By 2022,” Forbes, July 30, 2017, https://www.forbes.com/sites/louiscolumbus/2017/07/30/smart-factories-will-deliver-500b-in- value-by-2022/?sh=5b307d452d22. https://www.themanufacturer.com/articles/despite-pandemic-manufacturers-continue-invest-digital-factory-plans/; 15 Daniel S. Hamilton, The Transatlantic Digital Economy 2017 (Washington, DC: Center for Transatlantic Relations, 2017); Digital Economy Compass 2018, Statista.com, file:///C:/Users/Owner/Downloads/study_id52194_digital-economy-compass.pdf; International Technology and Innovation Foundation (ITIF), “The Task Ahead of US,” http://www2.itif.org/2019-task-ahead.pdf. 16 Gronvall, op. cit; Paul A. Rota et al., “Characterization of a novel coronavirus associated with severe acute respiratory syndrome,” Science, May 2003, Volume 300, Issue 5624; McKinsey Global Institute, The Bio Revolution: Innovations transforming economies, societies, and our lives, May 2020, https://www.mckinsey.com/~/media/McKinsey/Industries/Pharmaceuticals%20and%20Medical%20Products/Our%20Insights/The%20Bio%20Revolution%20 Innovations%20transforming%20economies%20societies%20and%20our%20lives/MGI-Bio-Revolution-Report-May-2020.ashx; Alison Snyder, Eileen Drage O'Reilly, “The race to make vaccines faster,” Axios, April 23, 2020. 17 Lindsay Gorman, “A Silicon Curtain is Descending: Technological Perils of the Next 30 Years,” German Marshall Fund of the United States, September 12, 2019, https://www.gmfus.org/publications/silicon-curtain-descending-technological-perils-next-30-years; McKinsey, op. cit. 18 Gronvall, op. cit.; McKinsey, op. cit. 19 WTO, World Trade Report 2019, op. cit. A recent UNCTAD research paper (Banga, 2019[55]) identifies a list of “Digitisable products” – those products which are “traded both in the physical form as well as online i.e. downloaded from the Internet e.g. music, e-books, software etc”. Banga goes on to explain that the “electronic transmissions” associated with these digital transmissions are increasingly important. “Digital technologies like 3D printing, robotics, and Big Data analytics depend heavily on electronic transmissions and can therefore lead to exponential growth in this trade”. 20 Ibid. 21 Ibid; OECD, “The impact of digitalisation on trade,” https://www.oecd.org/trade/topics/digital-trade/. 22 Erik van der Marel, “Globalization Isn’t in Decline: It’s Changing,” ECIPE Policy Brief 6/2020, https://ecipe.org/wp-content/uploads/2020/08/ECI_20_PolicyBrief_06_2020_LY06.pdf; Rachel F. Fefer, Wayne M. Morrison, Shayerah Ilias Akhtar, “Digital Trade and U.S. Trade Policy,” Congressional Research Service, May 21, 2019, https://fas.org/sgp/crs/misc/R44565.pdf; Suominen, op. cit. 23 Soumitra Dutta and Bruno Lanvin, eds., The Network Readiness Index 2020: Accelerating Digital Transformation in a post-COVID Global Economy (Washington, DC: Portulans Institute, 2020), https://networkreadinessindex.org/wp-content/uploads/2020/10/NRI-2020-Final-Report-October2020.pdf 24 See Table 15. Also David Bartlett, “Transatlantic data flows: data privacy and the global digital economy,” RSM, January 16, 2018, https://www.rsm.global/insights/ economic-insights/transatlantic-data-flows-data-privacy-and-global-digital-economy. 25 For recent efforts, see Daniel Ker and Emanuele Mazzini, Perspectives on the Value of Data and Data Flows, OECD Digital Economy Papers, No. 299, December 2020, https://www.oecd-ilibrary.org/docserver/a2216bc1-en.pdf; UNCTAD, Digital Economy Report 2019, https://unctad.org/en/PublicationsLibrary/der2019_ en.pdf; Erik Brynjolfsson and Avinash Collis, “How Should We Measure the Digital Economy?” Hutchins Center Working Paper #57, Brookings Institution, January 2020, https://www.brookings.edu/wp-content/uploads/2020/01/WP57-Collis_Brynjolfsson_updated.pdf; OECD-WTO-IMF Handbook on Measuring Digital Trade and OECD/IMF, “How to Move Forward on Measuring Digital Trade,” December 2019, available at https://www.imf.org/external/pubs/ft/bop/2019/pdf/19- 07.pdf; Digital Economy Report 2019, op. cit.; Fefer, Morrison, Akhtar, op. cit; Christian Ketels, Arindam Battacharya and Liyana Satar, “Digital Trade Goes Global,” BCG Henderson Institute, August 12, 2019, https://www.bcg.com/publications/2019/global-trade-goes-digital.aspx. 26 U.S. Bureau of Economic Analysis, Defining and Measuring the Digital Economy Data Tables 1997-2017, April 2, 2019. 27 The U.S. Bureau of Economic Analysis (BEA) defines those services as including three categories of international trade in services: telecommunications services, computer services, and charges for the use of intellectual property associated with computer software. 28 The BEA approach draws on work by UNCTAD and the OECD. See BEA International Data, https://www.bea.gov/iTable/index_ita.cfm; Jessica R. Nicholson, '' New BEA Estimates of International Trade in Digitally Enabled Services,'' May 24, 2016, Bureau of Economic Analysis, http://www.esa.doc.gov/economic-briefings/new-bea-estimates-international-trade-digitally-enabled-services. These products are often referred to as “digitally deliverable” (OECD-WTO-IMF, 2019[50]), meaning that they can, and are increasingly, being delivered in the form of data flows. 29 https://www.ntia.doc.gov/files/ntia/publications/measuring_cross_border_data_flows.pdf; United States International Trade Commission, “Digital Trade in the U.S. and Global Economies, Part 2”, Pub.4485, Investigation No.332-540, August 2014, p.47.

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30 Jessica R. Nicholson and Ryan Noonan, “Digital Economy and Cross-Border Trade: The Value of Digitally-Deliverable Services,” Washington, DC. U.S. Department of Commerce, Economics and Statistics Administration, ESA Issue Brief # 01-14, January 27, 2014, available at http://www.esa.doc.gov/sites/default/files/ digitaleconomyandcross-bordertrade.pdf. 31 The OECD/IMF/WTO Handbook defines digital trade as “trade that is digitally ordered and/or digitally delivered,” yet data statistics have not yet been aligned to this definition. That leaves us with digitally-enabled services as the default metric. For more, see IMF/OECD, “How to move forward on measuring digital trade,” Thirty- Second Meeting of the IMF Committee on Balance of Payments Statistics, Thimphu, Bhutan October 29–November 1, 2019, https://www.imf.org/external/pubs/ ft/bop/2019/pdf/19-07.pdf; Joshua P. Meltzer, “The Importance of the Internet and Transatlantic Data Flows for U.S. and EU Trade and Investment,’’ Brookings Institution, Global Economy and Development Working Paper 79, October 2014; Ryan Noonan, ''Digitally Deliverable Services Remain an Important Component of U.S. Trade,'' Washington, DC. U.S. Department of Commerce, Economics and Statistics Administration, May 28, 2015, available at http://www.esa.gov/economic- briefings/digitally-deliverable-services-remain-important-component-us-trade. 32 Digital Economy Report 2019, op. cit. 33 Ibid; Meltzer, op. cit. 34 Ker and Mazzini, op. cit., p. 71. 35 Note that data on EU28 exports and imports of services by product is not available from Eurostat for the year 2019. 36 Note that these figures are sourced from the Eurostat International Trade in Services database, and can vary from the corresponding U.S.-EU bilateral trade figures reported by the U.S. Bureau of Economic Analysis. Differences can occur in how services are measured, classified, and attributed to partner countries, resulting in asymmetries in the two data sources. For more information on these asymmetries, please see Eurostat report, “Transatlantic Trade in Services: Investigating Bilateral Asymmetries in EU-US Trade Statistics, 2017 edition,” https://ec.europa.eu/eurostat/documents/7870049/8544118/KS-GQ-17-016-EN-N.pdf/eaf15b03- 5dcf-48dd-976f-7b4169f08a9e. 37 Ibid. 38 While affiliate sales are a more important means of delivery for digital services and digitally-enabled services than cross-border trade, the two modes of delivery are more complements than substitutes, since foreign investment and affiliate sales increasingly drive transatlantic trade flows. The fact that digital services and digitally-enabled services are following this same broad pattern of transatlantic commercial flows reinforces our point that intra-firm trade is critical to the transatlantic economy. 39 “The great mall of China,” The Economist, January 2, 2021. 40 Statista.com. For official definitions and discussion of e-commerce, see U.S. International Trade Commission, Digital Trade in the U.S. and Global Economies, Part 2, Publication Number 4485, August 2014, https://www.usitc.gov/publications/332/pub4485.pdf; U.S. Census Bureau, https://www.census.gov/programs-surveys/ e-stats.html; OECD, ''E-commerce uptake,'' http://www.oecd-ilibrary.org/sites/sti_scoreboard-2011-en/06/10/index.html; https://10ecommercetrends.com/10- ecommerce-trends-for-2018/. 41 See UNCTAD, ''In Search of Cross-Border E-Commerce Trade Data,'' Technical Note NO 6 Unedited, April 2016, available at http://unctad.org/en/PublicationsLibrary/ tn_unctad_ict4d06_en.pdf. 42 UNCTAD, “Estimates of Global E-Commerce 2018,” https://unctad.org/system/files/official-document/tn_unctad_ict4d15_en.pdf; UNCTAD, “Global e-commerce hits $25.6 trillion - latest UNCTAD estimates,” April 27, 2020, https://unctad.org/news/global-e-commerce-hits-256-trillion-latest-unctad-estimates. 43 Ibid; https://ustr.gov/about-us/policy-offices/press-office/fact-sheets/2018/march/2018-fact-sheet-key-barriers-digital; 44 “Cross-Border E-Commerce,” Statista.com, file:///C:/Users/Owner/Downloads/study_id61740_cross-border-e-commerce.pdf. https://www.continuumcommerce. com; The Paypers, Cross-Border Payments and Commerce Report 2019 – 2020, December 2019, file:///C:/Users/Owner/Downloads/1239955.pdf; PPRO, “2019- 2020 Payments and e-commerce report – Western and Central Europe, file:///C:/Users/Owner/Downloads/PPRO-WECE-Report-2020_web.pdf. 45 Statista Digital Market Outlook 2020, eCommerceDB.com. 46 The OECD definition of an online platform is “digital services that facilitate interactions between two or more distinct but interdependent sets of users (whether 6 firms or individuals) who interact through the service via the internet.” OECD, Online Platforms: A Practical Approach to Their Economic and Social Impacts, Paris, 2018. 47 OECD, The Digital Transformation of SMEs, op. cit. 48 The Paypers, op. cit. 49 Ibid. 50 Cross-Border Commerce Europe, “Top 100 Cross-Border Marketplaces Europe. An Annual Analysis of the Best Global Cross-Border Platforms Operating in Europe, EU 28 Including UK,” September 24, 2020, https://www.cbcommerce.eu/press-releases/press-release-top-100-cross-border-marketplaces-europe-an-annual- analysis-of-the-best-global-cross-border-platforms-operating-in-europe-eu-28-including-uk/. 51 Digital Economy Report 2019, op. cit.; https://blog.telegeography.com/466-tbps-the-global-internet-continues-to-expand. 52 Fefer, Morrison and Akhtar, op. cit.; Anthony Gardner, “A Transatlantic Perspective on Digital Innovation,’’ September 2015, http://useu.usmission.gov/sp-092015.html. 53 https://www.digitaleurope.org/resources/schrems-ii-impact-survey-report/. 54 See https://www.politico.eu/article/in-small-steps-europe-looks-to-tighten-grip-on-data/; For more on the implications of this decision, see Daniel S. Hamilton, “Europe’s new privacy ruling will help fragment the global economy,” Washington Post, July 22, 2020, https://www.washingtonpost.com/politics/2020/07/22/ europes-new-privacy-ruling-will-help-fragment-global-economy/. 55 485.66 million megabits per second, a unit that represents the amount of data that can be sent and received in one second. Comparisons are of the amount of data going in and out of a country or region in one second. See Toru Tsunashima, “China rises as world's data superpower as internet fractures,” Nikkei Asia, November 25, 2020. 56 James Manyika, Susan Lund, Jacques Bughin, Jonathan Woetzel, Kalin Stamenov, and Dhruv Dhingra, “Globalization: The new era of global flows,” McKinsey Global Institute, February 24, 2016, https://www.mckinsey.com/business-functions/mckinsey-digital/our-insights/Digital-globalization-The-new-era-of-global-flows,. 57 See ''Measuring the Value of Cross-Border Data Flows,” Economics and Statistics Administration and the National Telecommunications and Information Administration, U.S. Department of Commerce, September 2016, p. 21, https://www.ntia.doc.gov/files/ntia/publications/measuring_cross_border_data_flows.pdf. 58 Ibid; Manyika, et al., op. cit.; Michael Mandel, ''Data, Trade and Growth,'' Progressive Policy Institute, April 2014, http://www.progressivepolicy.org/wp-content/ uploads/2014/04/2014.04-Mandel_Data-Trade-and-Growth.pdf. 59 Manyika, et al., op. cit.; Raghu Das and Peter Harrop, RFID forecasts players and opportunities 2014–2024, IDTechEx, November 2013. 60 Ker and Mazzini, op. cit., pp. 71, 78, 79. 61 TeleGeography, Global Internet Geography, 2013; TeleGeography, Global Internet Map, 2012. 62 Telegeography, “State of the Network 2021,” op. cit. 63 Digital Economy Report 2019, op. cit.; Jon Hjembo, Telegeography, ''The Colocation Sector. Shifting Dynamics and Stable Fundamentals,'' presentation at Telegeography Workshop, Pacific Telecommunication Council '17, Jan 15-18, 2017. 64 Satellites transmit less than one-half of 1% of such traffic. They cannot compete with submarine cables when it comes to digital communication capacity, speed, or transaction time (latency). See Clifford Holliday, “Re-Imagining Telecom Subsea Cables,” SubTel Forum Magazine, February 2020; David W. Brown, ''10 Facts about the Internet's Undersea Cables,'' Mental Floss, Nov 12, 2015, http://mentalfloss.com/article/60150/10-facts-about-internets-undersea-cables; Geof Wheelwright, ''Undersea cables span the globe to send more data than satellites,'' Financial Times, November 2, 2016; Nicole Starosielski, “In our Wi-Fi world, the internet still depends on undersea cables,” The Conversation, November 3, 2015, https://theconversation.com/in-our-wi-fi-world-the-internet-still-depends-on-undersea- cables-49936. Telegeography, “Submarine Cables Frequently Asked Questions,” https://www2.telegeography.com/submarine-cable-faqs-frequently-asked- questions. 65 Wayne Nielsen, ''North Atlantic Regional Roundup,'' Presentation to the 2017 Pacific Telecommunications Council, January 2017, https://www.ptc.org/assets/ uploads/papers/ptc17/PTC17_Sun_Submarine%20WS_Nielsen.pdf; http://aquacomms.com/wp-content/uploads/P54-55-Aqua-Comms-advertorial.pdf; https:// cacm.acm.org/magazines/2020/1/241709-how-the-internet-spans-the-globe/fulltext?mobile=false; Mauldin, op. cit. 66 Ingrid Burrington, ''What's Important About Underwater Internet Cables,'' The Atlantic, November 9, 2015, https://www.theatlantic.com/technology/archive/2015/11/ submarine-cables/414942/; https://vmblog.com/archive/2019/11/20/infinera-2020-predictions-next-gen-submarine-cable-architectures.aspx#.XisZOchKiM8. 67 Telegeography, “State of the Network 2021,” January 2021, https://www2.telegeography.com/hubfs/assets/Ebooks/state-of-the-network-2021.pdf. 68 Laurens Cerulus, “Lisbon eyes undersea investment to bolster EU tech infrastructure, Politico, December 10, 2020, https://www.politico.eu/article/submarine- cables-europe-lisbon-eyes-undersea-investment-bolster-tech-infrastructure/; European Commission, “BELLA: A new digital data highway between Europe and Latin America,” August 13, 2018, https://ec.europa.eu/digital-single-market/en/news/bella-new-digital-data-highway-between-europe-and-latin-america. 69 Telegeography, “State of the Network 2021,” January 2021,op. cit.; Miller, op. cit.; Alan Mauldin, ''Rising Tide: Content Providers' Investment in Submarine Cables Continues,'' Telegeography, May 27, 2016, http://blog.telegeography.com/rising-tide-content-providers-investment-in-submarine-cables-continues; Wheelwright, op. cit.; Miller, ''The Colocation Sector: Shifting Dynamics, Stable Fundamentals,'' Telegeography, February 3, 2017, http://blog.telegeography.com/ptc-colocation- presentation-2017-market-summary; Alan Mauldin, “Content, Capacity, and the Great, Growing Demand for International Bandwidth,” Telegeography, May 30, 2018, https://blog.telegeography.com/t-growing-demand-for-international-bandwidth-content-providers-capacity; Alan Mauldin, International Internet Capacity Growth Just Accelerated for the First Time Since 2015,” Telegeography, September 20, 2018, https://blog.telegeography.com/international-internet-capacity- growth-just-accelerated-for-the-first-time-since-2015; https://www2.telegeography.com/hubfs/2019/Presentations/Kate-Reilly-Capacity-North-America-2019. pdf; https://www2.telegeography.com/hubfs/2019/Presentations/mythbusters.pdf; Adam Satariano, “How the Internet Travels Across Oceans,” New York Times, March 10, 2019, https://www.nytimes.com/interactive/2019/03/10/technology/internet-cables-oceans.html; Executive Summary: Telegeography Global Bandwidth Research Service, http://www.dri.co.jp/auto/report/telegeo/files/telegeography-global-bandwidth-research-executive-summary.pdf. Nielsen, op. cit. 70 Justin Dustzadeh, “5 Technology Trends to Impact Digital Infrastructure in 2021,” Equinix, January 4, 2021, https://blog.equinix.com/blog/2021/01/04/5-technology-trends-to-impact-digital-infrastructure-in-2021/; Nick Jones and David Cearley, “Top 10 Strategic Technology Trends for 2020: Empowered Edge,” Gartner, March 10, 2020, ID G00450640. 71 Jim Poole, “Submarine cable boom fueled by new tech, soaring demand,” Network World, March 6, 2018, https://www.networkworld.com/article/3260784/lan- wan/submarine-cable-boom-fueled-by-new-tech-soaring-demand.html. 72 Equinix, GXI Vol.4, Forecasts and Data: Insights for the New Digital Economy, file:///C:/Users/Owner/Downloads/EQIX-GXI-Vol4_Forecast_FINAL_9_Sep%20(3). pdf; https://www.prnewswire.com/news-releases/private-connectivity-at-the-edge-forecast-to-grow-by-more-than-50-percent-annually-300938345.html. 73 See Pacific Telecommunications Council Secretariat, “Is this the end of the internet as we know it?” January 3, 2019, https://www.ptc.org/2019/01/is-this-the-end- of-the-internet-as-we-know-it/.

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5 The 50 U.S. States: European-Related Jobs, Trade and Investment

Nevada Finland

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U.S. personal savings rate FDI inflows soared dropped by almost 7.5% 16.3% 50% (2019) (2020) in the U.S. in 2020

Despite various potential headwinds and uncertainties production and distribution, and the effectiveness of surrounding the coronavirus outlook, many factors fiscal and monetary stimulus. point to continued economic recovery and more favorable conditions for European companies in According to the latest figures from the UN, foreign the United States in the year ahead. Foreign direct direct investment (FDI) inflows to both the United investment flows, driven by cross-border mergers States and Europe were severely impacted by the and acquisitions (M&A), should rebound in the next global recession. In the United States, FDI inflows year. The jobs recovery will continue, albeit at a more dropped by almost 50%, due to large declines in gradual pace. And pent-up consumer demand is investments from German, British and Japanese expected to drive personal consumption higher in companies. Cross-border M&A of U.S. assets to the second half of the year, especially in the services companies abroad fell 41%, with much of the decline sector. concentrated in the primary sector. Despite the turbulence, the United States remains one of the Last year, despite the COVID-19 induced recession, most attractive countries in the world for foreign U.S. personal incomes increased, and consumer direct investment. In 2020, the U.S. attracted $134 balance sheets strengthened, due to massive billion of inflows, ranking second place in terms of stimulus from the federal government. These FDI after China ($163 billion) (Table 1). Prior to 2020, economic relief measures, which included stimulus the United States had ranked number one in the checks to low- and middle-income consumers, world for FDI inflows for the last 14 years. expanded unemployment benefits, and forbearance on mortgage and student loans caused the personal Table 1 FDI Inflows in 2020, Select Countries savings rate to soar from 7.5% in 2019 to 16.3% in ($Billions) 2020. In April 2020, the U.S. savings rate reached its highest level on record, at 34% of disposable personal China income. In the aggregate, personal income increased United States by $1.2 trillion, or 6.3%, in 2020 – the highest percent increase in 15 years. High savings and rising incomes Singapore

have led to a quick recovery in consumer spending, India especially in durable goods. Services spending has lagged behind but should be unleashed as vaccine Brazil distribution picks up across the United States. Canada

Mexico Looking at structural drivers, we expect a more benign trade environment, reduced business Germany

uncertainty, and increased appetite for massive Australia fiscal and monetary stimulus programs to support a United strong U.S. economic recovery in 2021 and beyond. Kingdom In addition, the lowered corporate tax rate should Switzerland continue to drive investments into the United States Netherlands in the near to medium term. -200 -150 -100 -50 0 50 100 150 200 -200 -150 -100 -50 0 50 100 150 200 In 2020, the U.S. economy contracted by 3.5% in real Source: United Nations Conference on Trade and Development terms, the largest annual decline in 74 years. The (UNCTAD). Data are preliminary estimates as of January 2021. annualized decline in the second quarter of the year of -31.4% was the largest on record. It was followed in the next quarter by the sharpest-ever quarterly The U.S. economy increase of 33.4%. According to forecasts from the contracted by IMF, U.S. growth is expected to rebound to 5.1% in 2021 and slow to 2.5% by 2022. These forecasts are highly volatile, however, and could vary depending 3.5% on the trajectory of the virus, progress in vaccine in 2020

60 - THE TRANSATLANTIC ECONOMY 2021 5 - The 50 U.S. States: European-Related Jobs, Trade and Investment

Drivers of a strong U.S. economic recovery in 2021 and beyond

FDI flows Better trade environment

Job creation Reduced business uncertainty

Higher consumer Large fiscal and monetary spending stimulus programs

Table 2 Cumulative Investment Inflows 2000-2019 place in the World Economic Forum’s latest Global Rankings Competitiveness rankings. This competitiveness is driven by strong institutions, advanced technological readiness, world-class universities, a strong capacity Cumulative Percent Flows (Billions of World and culture of entrepreneurship, and a dense web Rank Country of U.S. $) Total of university-industry collaboration in research and 1 United States 4,491.3 16.6% development (R&D). The ability to attract R&D from companies abroad is important to the innovative 2 China 1,982.8 7.3% culture of the U.S. economy. R&D performed by 3 United Kingdom 1,693.5 6.3% affiliates of foreign companies accounts for 15.2% of 4 Hong Kong 1,382.1 5.1% total R&D conducted by all businesses in the United States. European companies account for two-thirds 5 Netherlands 992.2 3.7% of that foreign-funded R&D in the United States. 6 Brazil 921.7 3.4% 7 Germany 903.0 3.3% Additionally, European companies investing in the 8 Singapore 875.6 3.2% United States gain access to a desired pool of skilled, flexible, and productive labor. We estimate that 9 Canada 850.5 3.1% U.S. jobs supported directly by affiliates of foreign 10 Australia 698.5 2.6% companies totaled 8 million in 2019, or about 6%

Source: United Nations Conference on Trade and Development of total private industry employment in the United (UNCTAD). States. European companies accounted for 63% of Data as of June 2020. that figure, or 5 million jobs.

As Table 2 depicts, no country has attracted more Meanwhile, transparent rule of law, sophisticated FDI this century than the United States, taking in accounting, auditing, and reporting standards, $4.5 trillion cumulatively since 2000, more than secure access to credit, ease of entrepreneurship, the total for the next two countries (China and the and respect for intellectual property rights have all UK) combined. Multiple factors underpin America’s contributed to the stable and supportive business dominance in foreign investment flows. First, the environment in the United States. U.S. market is a critical destination for multinational companies looking to access a large and wealthy Europe’s Stakes in the United States consumer base, with a population of roughly 330 million and per capita income of $65,000. European firms maintained their dominant foreign investment position in the United States in 2020. In Second, the United States boasts a hyper- the first three quarters of the year, FDI inflows from competitive and dynamic economy, ranking second Europe represented over 60% of total U.S. inflows. These inflows, however, are down considerably from the prior year. Annualizing data for the first nine Jobs directly supported months of last year, U.S. FDI inflows from Europe are by European companies estimated to come in at $81 billion in 2020 versus $120 billion in 2019. in the U.S. (2019) 5 million

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The presence of European affiliates in many states and communities across the United States has helped to improve America’s job picture

Throughout Europe, the net change in investment states, followed by Canadian companies in 10 states flows to the United States in 2020 was mixed, with and Japanese companies in 7. some countries posting strong growth in FDI flows, while others saw a pullback. Swiss investment flows Despite the overall year-over-year decline in investment to the United States grew 190% in the first three flows, Europe continues to have an outsized investment quarters of the year, while flows from Italy and presence in the United States, as reflected by its FDI Finland were almost four times the amount of flows position, which is a more stable metric of foreign received during the first three quarters of 2019. By investment in the United States. In terms of foreign contrast, U.S. inflows from Germany, Ireland, Spain, capital stock in the United States, Europe again leads Sweden, and the UK were all lower in the first three the way. The region accounted for 64% of the total $4.5 quarters of 2020 than the same period a year ago. trillion of foreign capital sunk in the United States as of 2019. Total European investment stock in the United In terms of the outlook for 2021, we expect cross- States of $2.9 trillion was over three times the level of border M&A activity to drive the rebound in FDI in comparable investment from Asia. 2021, while investments in new assets (or “greenfield projects”) take longer to adjust. Business disruptions The United Kingdom remains by far the largest and uncertainty caused by COVID-19 led to a dramatic European investor in the United States, based on drop in transatlantic M&A flows in the beginning of FDI on a historic cost basis, with total FDI stock in the year; however, deal activity quickly rebounded the United States totaling $505 billion in 2019. The back to pre-crisis levels by June 2020. From June Netherlands ranked second in Europe ($487 billion), 2020 through January 2021, M&A announcements followed by Germany ($372 billion) and Switzerland between the United States and Europe averaged $60 ($301 billion). Many firms from these countries are billion a month, almost double the monthly volume just as embedded in the U.S. economy as in their own during the same period a year earlier. home markets.

By contrast, the recovery in greenfield FDI will be Whether Swiss pharmaceutical corporations, German more gradual. According to UNCTAD estimates, the auto manufacturers or British services providers, number of announced greenfield projects globally European firms’ commercial links to America have declined by 35% in 2020, a sign that global FDI driven corporate sales and profits higher in recent growth in 2021 is likely to remain subdued. FDI decades. In 2019, European firms earned $134 billion announcements in sectors such as autos, hotels in the United States – the second highest amount on & tourism, real estate, and oil & gas were the most record, though profits plunged in 2020 due to the harmed by the pandemic. On the other hand, sectors global pandemic. Through the first nine months of such as telecommunications, semiconductors, 2020 European affiliate income earned in the United consumer products and biotechnology saw FDI States totaled $65 billion. In spite of the pandemic, announcements increase in 2020. Renewable energy Austria, Denmark, Finland, and France actually is another sector that should benefit from the saw their investment income in the United States transatlantic economic recovery (See Box 5.1). increase in the first nine months of 2020, compared to the same period in 2019. Taking the long view, European firms should continue to drive the FDI affiliate earning levels for most European firms are recovery. UK firms were the largest source of significantly higher today than they were at the start greenfield foreign investment projects in 18 U.S. of the century. As European firms have built out their states during the ten-year period from October U.S. operations, the payoff has been rising affiliate 2010-September 2020. German companies led in 11 earnings in one of the largest markets in the world.

Total European FDI 64% stock in the U.S. $2.9 trillion of total FDI in the U.S. (2019)

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Table 3 European Foreign Direct Investment and Income Earned in the United States (Billions of U.S. $)

30003,000 150150

25002,500 125125

20002,000 100100

15001,500 7575

10001,000 5050

500500 2525

0 0 00 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

FDI position (LHS) FDI income (RHS)

Sources: Bureau of Economic Analysis. Data as of January 2021.

Table 3 highlights this connection between European Table 4 Ranking of Top 20 States by Jobs Supported investment in the United States and European affiliate Directly by European Investment earnings. The two metrics are highly correlated – the (Thousands of employees) greater the earnings, the greater the likelihood of more capital investment, and the more investment, U.S. State 2016 2017 2018 the greater the upside for potential earnings and California 430.7 468.6 490.7 affiliate income. The bottom line is that Europe’s Texa s 366.0 376.2 401.5 investment stakes in the United States have paid handsome dividends over the years, notably since New York 345.1 341.1 357.4 the Great Recession, given the growth differential Illinois 234.2 236.5 240.3 between the United States and Europe. Pennsylvania 222.5 225.9 232.9 Europe’s Stakes in America’s 50 Florida 217.2 216.9 229.5 States New Jersey 193.3 199.7 204.5 European firms can be found in all 50 states, and in Michigan 159.3 188.2 203.3 all economic sectors – manufacturing and services North Carolina 187.5 194.4 199.2 alike. The employment impact of European firms in Ohio 155.7 166.4 172.8 the United States is quite significant. Table 4 provides a snapshot of state employment supported directly Massachusetts 159.6 163.5 167 by European affiliates across the United States. Georgia 141.3 153.5 162.3 It is important to note that the chart represents Virginia 134.7 142.6 153.1 only those jobs that have been directly created by European investment, and thus underestimates the Indiana 115.6 121.5 126.4 true impact on U.S. jobs of America’s commercial Tennessee 100.3 108.1 113.5 ties to Europe. Jobs tied to exports and imports of South Carolina 98.3 106.9 110.3 goods and services are not included, nor are many Minnesota 75.4 92.7 94.6 other jobs created indirectly through suppliers or distribution networks and related activities. Missouri 78.1 86.6 89.6 Maryland 91.6 87.7 88.7 In 2018, the latest year of available data, all of the top Connecticut 81.6 83.2 87.9 20 states measured by European affiliate employment increased hiring. Of these states, Michigan, Virginia, Source: Bureau of Economic Analysis. and Texas had the largest growth rates of European Data as of January 2021. affiliate employment in 2018.

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European affiliate But profits plunged to earnings in the U.S. $65 billion in the first nine $134 billion months of 2020 (2019)

UK firms were the largest sources of onshored jobs Table 5 Exports of Goods Shipped by European in 22 U.S. states. Japanese companies led in 11 states, Companies Operating in the United States Canadian companies in 9, Dutch companies in 3, ($Billions) German companies in 3, and French companies were the leading source of onshored jobs in 2 states. Germany

Europe is by far the largest source of FDI in Netherlands the manufacturing industry, with European companies representing 74% of the total inward United Kingdom investment position in the United States. Within the France manufacturing industry, the U.S. chemicals sector was

the biggest recipient of European investment ($592 Switzerland billion), followed by transportation equipment ($271 billion). In terms of European affiliate employment, Ireland the retail trade industry employed the most workers Sweden (567,000 jobs in 2018) while European companies in

chemicals manufacturing, transportation equipment Belgium manufacturing, wholesale trade, and professional, scientific, and technical services were also important Italy contributors to U.S. jobs. Finland

In general, the presence of European affiliates in many 0 1010 2020 3030 4040 5050 6060 states and communities across the United States has helped to improve America’s job picture. The more Source: Bureau of Economic Analysis. European firms embed in local communities around Data for 2018. the nation, the more they tend to generate jobs and income for U.S. workers, increase sales for local suppliers and businesses, expand revenues for local Wholesale trade, transportation equipment, and communities, and encourage capital investment and chemical manufactures represented the largest R&D expenditures for the United States. categories of exports by affiliates to markets outside the United States. In the end, the more European Deep investment ties with Europe have also boosted affiliates export from the United States, the higher U.S. trade. Table 5 illustrates the export potential of the number of jobs for U.S. workers and the greater European affiliates operating in the United States. the U.S. export figures. As a point of reference, in any given year, foreign affiliates based in the United States and exporting Every U.S. state maintains cross-border ties with from there typically account for one-fourth of total Europe, with various European countries key export U.S. merchandise exports. The bulk of these exports markets for many U.S. states, a dynamic that creates are intra-firm trade, or trade between the affiliate and generates growth in the United States. Table 6 and its parent company. In 2018, the last year of ranks the top 20 state goods exporters to Europe available data, U.S. exports shipped by all majority- in 2019. Texas ranked number one, followed by owned foreign affiliates totaled $395 billion, with California, New York, and South Carolina. Overall European affiliates accounting for 57% of the total. exports to Europe were up 3% in 2019 and have German companies exported more than $50 billion doubled in value since 2000. in exports made in the U.S.A.

TOP Top 3 states European affiliate jobs 3 Texa s California New York

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Europe accounts for 74% of total FDI in the U.S. manufacturing industry

Table 6 Ranking of Top 20 U.S. States Total Goods Exports to Europe, by Value ($Billions)

% Change % Change U.S. State 2019 2000 from 2000 from 2018 Texa s 52.5 12.3 328% 16% California 38.9 27.9 40% 6% New York 26.1 15.3 70% -12% South Carolina 12.5 2.8 347% 25% Pennsylvania 12.4 4.7 165% 11% Louisiana 12.3 3.3 273% -2% Kentucky 11.8 3.1 285% 5% Illinois 11.5 7.3 57% -12% Georgia 11.3 4.0 186% 10% New Jersey 11.3 6.4 77% 4% Washington 11.1 13.1 -15% -31% Utah 11.0 1.3 719% 56% Massachusetts 10.9 8.0 36% 13% Florida 10.4 3.9 168% -7% North Carolina 9.6 4.6 107% 7% Indiana 9.6 3.1 204% 0% Ohio 9.5 5.0 88% -3% Michigan 8.3 5.0 65% 3% Connecticut 8.2 3.5 134% -13% Tennessee 6.8 2.7 153% -2% U.S. Total 381.7 187.4 104% 3%

Source: Foreign Trade Division, U.S. Census Bureau. Data as of January 2021.

U.S. merchandise exports to Europe are still more than not include U.S. state exports of services. This is triple U.S. exports to China, as shown in Table 7. Forty- an additional source of jobs and incomes for U.S. eight of the fifty U.S. states exported more to Europe workers, with most U.S. jobs tied to services. Europe than China; only New Mexico and Oregon exported is by far the most important market in the world more goods to China than to Europe in 2019. for U.S. services, and the United States consistently records a services trade surplus with Europe. Suffice In addition, while these figures are significant, they it to say that if services exports were added to goods actually underestimate Europe’s importance as an exports by state, the European market becomes even export destination for U.S. states because they do more important.

Europe 48/50 China states export more goods to Europe than to China (2019)

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Table 7 U.S. State Exports of Goods to Europe and China, 2019 ($Millions) Appendix A highlights European-related jobs, trade, and investment for each of the 50 states. U.S. State Europe China Alabama 6,606 2,317 Alaska 1,176 855 Arizona 4,828 1,087 Arkansas 1,645 191 California 38,929 15,848 Colorado 1,814 524 Connecticut 8,183 1,262 Delaware 1,450 464 Florida 10,444 1,361 Georgia 11,320 2,365 Hawaii 25 21 Idaho 409 209 Illinois 11,510 2,915 Indiana 9,559 2,022 Iowa 2,517 760 Kansas 2,552 553 Kentucky 11,801 2,098 Louisiana 12,264 4,929 Maine 446 134 Maryland 4,943 529 Massachusetts 10,877 2,370 Michigan 8,318 3,240 Minnesota 5,112 2,125 Mississippi 2,095 457 Missouri 2,437 598 Montana 280 96 Nebraska 933 341 Nevada 2,613 514 New Hampshire 2,621 294 New Jersey 11,272 1,834 New Mexico 308 803 New York 26,102 2,850 North Carolina 9,573 3,250 North Dakota 254 19 Ohio 9,456 3,240 Oklahoma 1,423 212 Oregon 2,715 7,193 Pennsylvania 12,396 2,544 Rhode Island 900 156 South Carolina 12,474 6,495 South Dakota 160 75 Tennessee 6,836 2,096 Texa s 52,517 10,922 Utah 10,991 575 Vermont 457 187 Virginia 5,298 1,196 Washington 11,095 8,987 West Virginia 1,918 373 Wisconsin 4,426 1,373 Wyoming 52 24 Total United States 381,656 106,447

Source: U.S. Census Bureau, Foreign Trade Division. Data as of January 2021.

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Box 4.1. The Transatlantic Energy Economy

U.S. and European firms are deeply embedded in each other’s traditional and renewable energy markets – through trade, foreign investment, cross-border financing, and collaboration in research and development.

Over the years, foreign companies have invested roughly $400 billion in U.S. energy-related industries.1 In 2018, FDI in the U.S. energy industry directly supported 173,500 U.S. jobs, contributed $1.2 billion in R&D and generated $5.7 billion in U.S. exports.2 European companies have been among the largest investors, and German companies by far are the leading source of foreign direct investment in the U.S. energy economy. Over the past decade, German firms were behind about 16% of the 830 greenfield investment projects in the U.S. energy sector (Table 8). Other notable European investors include France (9%), the UK (8%), and Spain (7%).

Table 8 Top Sources of Inward FDI in U.S. Energy 830 Total Announced Greenfield Projects, October 2010 - September 2020

Germany 129

Canada 94

France 74

UK 66

Japan 57

Spain 56

Italy 41

China 40

29 Denmark

Switzerland 27

0 50 100 150 0 50 100 150 Number of projects Source: SelectUSA, U.S. Department of Commerce. Data as of November 2020.

In particular, renewable energy has become an increasingly important sector in terms of FDI. As shown in Table 9, renewable energy projects outpaced traditional energy investments in 2020 for the first time in history. Despite the coronavirus recession, renewable energy investments proved to be relatively resilient during 2020. According to the Financial Times’ investment monitor, fDi Markets, renewable energy FDI fell 11% in 2020, versus an overall 40% drop in FDI across all industries. “Greenfield investment” (or investment in new assets) in the coal, oil and gas industries, meanwhile, dropped by over 62% in 2020. The United States and the U.K were the top countries for renewable energy FDI announcements, while wind and solar were the top sectors. The fastest growing region was Europe, with greenfield FDI into European renewable projects rising by 70% last year, driven by the UK, France, Poland, Portugal, Italy and Ireland.

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Table 9 Renewables vs. Traditional Energy Investment Announced Greenfield FDI (Millions $)

140,000140000

120,000120000

100,000100000

80,00080000

60,00060000

40,00040000

20,00020000

00 2005 2010 2015 2020 Coal, oil and gas Renewables Source: Financial Times, fDi Markets. Data as of February 2021.

Growing interest in sustainable investing has been a key area of support for the sector. According to data from Bloomberg, social, sustainability and green bond issuance surged 31% in 2020 to $742 billion (Table 10). These include debt issued for social projects, such as job support, as well as for environmental causes. Sales of green bonds last year rose 13% to $304 billion. Europe and the United States made up over 80% of all green bonds issued in 2020, and 78% of all sustainable debt issuance.

Table 10 Sustainable Debt Issuance Hits Record High in 2020 Global Sustainable Debt Issuance (Billions $)

800

700

600

500

400

300

200

100100

0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Europe U.S. Other

Data includes sales of green, social and sustainability bonds, sustainability-linked bonds, green loans, and sustainability- linked loans. Source: Bloomberg New Energy Finance. Data as of January 2021.

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In terms of international trade, U.S. energy exports slumped in 2020 on account of the pandemic- induced slowdown in global travel. That said, U.S.-EU trade in energy products is still much higher today than a few years ago. Rising domestic and foreign investments in the U.S. energy economy, as well as a liberalization of energy trade policy, have helped propel the United States to become a top producer and exporter of energy. Monthly liquefied natural gas (LNG) exports from the United States to Europe dipped in 2020, but still averaged 65 billion cubic feet for the year, up from 57 billion cubic feet in 2019 (See Table 11).

Table 11 U.S. Liquefied Natural Gas (LNG) Exports to the UK and EU Countries Million Cubic Feet (6 month moving average)

120,000120000

100,000100000

80,00080000

60,00060000

40,00040000

20,00020000

0 0 2016 2017 2018 2019 2020

Source: U.S. Energy Information Administration. Data as of February 2021.

U.S. and European companies will be critical to the development of a cleaner energy future. The EU’s ambitious European Green Deal outlines a wide set of initiatives ranging from the de-carbonization of the energy sector, development of cleaner modes of transport, renovation of buildings to reduce energy use, and investments in the circular economy. The plan will require trillions of euros in investments to achieve the ambitious target of making the continent climate neutral by 2050. More recently, policymakers in the EU reached an agreement in November for a ¤1.8 trillion package from 2021-2027 to “rebuild a greener, more digital and more resilient Europe.”3 According to data tracked by Rhodium Group, stimulus spending commitments for “green” initiatives made up 15% of total COVID-19 stimulus announced by the EU and its member states’ governments in 2020.4

Largely unnoticed by media and politicians, U.S. companies in Europe have become a driving force for Europe’s green revolution, especially through the addition of wind and solar capacity on the continent. Since 2007, U.S. companies have been responsible for more than half of the long-term renewable energy agreements in Europe. As shown by Table 12, U.S. companies account for four of the top five purchasers of solar and wind capacity in Europe.

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Table 12 Top Purchasers of Renewable Energy in Europe, 2007-2020 (Megawatts)

Google LLC**

Amazon**

Norsk Hydro ASA

Alcoa Corp**

Facebook**

Deutsche Bahn

Vivens

Microsoft Corp**

Anheuser-Busch InBev NV

Novartis

0 500 1,0001000 1,5001500 2,0002000 n Wind n Solar n Hydro

** Companies with asterisks are U.S. companies Source: Bloomberg New Energy Finance. Data as of January 2021.

Meanwhile, in the U.S., the new administration has made climate change a top priority, moving to rejoin the Paris Climate Accord in early 2021. Future stimulus plans in the U.S. are likely to be focused on rebuilding jobs through sustainable infrastructure development and clean energy. According to the U.S. Energy Information Administration, the renewables share of electricity generation in the United States is estimated to increase from 21% today to 42% by 2050.5

Supporting the discovery of future green technologies, government budgets for energy research, development, and demonstration (RD&D) in the United States and Europe were $17 billion in 2019, according to the International Energy Agency – about double the amount spent in China. Business-funded R&D has also become an increasingly important source of R&D in the United States and Europe. A dynamic and innovative private sector should continue to drive investments and innovations in renewable energy R&D over the coming decade.

Table 13 Total CO2 emissions (MMtons CO2): Transatlantic Economy vs. the World

World U.S. and Europe 40,000 9,000 35,000 8,000 30,000 7,000 6,000 25,000 5,000 20,000 4,000 15,000 3,000 10,000 2,000 5,000 1,000 0 0 * * 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020

Europe United States *Global Carbon Project estimates for 2020. Sources: Our World in Data; Global Carbon Project. Data as of 2021.

Endnotes

1 Bureau of Economic Analysis, total inward foreign direct investment position on a historic cost basis in 2019 in petroleum and related industries, and electric power generation transmission and distribution. 2 SelectUSA, https://www.selectusa.gov/servlet/servlet.FileDownload?file=015t00000001nSg 3 European Commission, Recovery Plan for Europe, https://ec.europa.eu/info/strategy/recovery-plan-europe_en 4 Rhodium Group, “2020 Green Stimulus Spending in the World’s Largest Economies,” February 4, 2021. 5 U.S. Energy Information Administration, Today in Energy, February 8, 2021.

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California Italy

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-6.6% -4.5% in 2020 during the 2009 global financial crisis

Europe experienced its sharpest recession since WWII

In 2020, the European economy experienced its According to the latest figures from the UN, foreign sharpest recession in the post-WWII era due to the direct investment (FDI) inflows to both the United global pandemic’s effect on some of the region’s States and Europe were severely impacted by the most prominent industries. According to initial global recession. Global FDI flows to Europe entirely estimates from Eurostat, euro area GDP fell 6.6% evaporated, down from $344 billion in 2019 to on an annual basis, versus a 4.5% drop during the roughly $0 in 2020. These sharp swings in global 2009 global financial crisis. The UK economy was FDI to Europe, however, were mainly driven by large especially hard hit by the coronavirus, contracting by divestments and negative intra-company loans in the 9.9% in 2020. A large portion of economic activity in Netherlands and Switzerland (-$150 billion and -$88 European countries depends on the services sector billion FDI flows respectively). Given their one-off and, particularly, areas such as accommodation, nature, we expect the recent investment declines to food and beverage, transport, travel, and culture and be temporary. FDI inflows to Europe should bounce recreational activities. European economies highly back to positive territory in 2021, however they could exposed to these services industries saw the some of continue to be relatively weak until the pandemic the greatest economic declines in 2020. For example, uncertainty subsides. in Spain tourism represents 11.8% of GDP and 13.5% of total employment; its GDP contracted by 11%. Similarly, Notwithstanding the recent cyclical slowdown and the economies of Portugal, France, and Italy all rely economic risks, Europe remains one of the most heavily on tourism, and as a result have been more attractive regions of the world for U.S. foreign direct severely impacted by border closings, government investment. The latest investment figures underscore lockdowns and social distancing measures. Germany, corporate America’s enduring commitment to its which depends to a greater extent on manufacturing, long-standing transatlantic partner. Measured on saw a smaller GDP decline of 4.9%, also in part a historic cost basis, the total stock of U.S. FDI in because it deployed massive government support to Europe was $3.6 trillion in 2019, or 60% of the total keep the economy on track as much as possible. U.S. global investment position. This is almost four times the amount of comparable U.S. investment in the Asia-Pacific region.

Global FDI flows to Europe evaporated: from $344 billion in 2019 to roughly $0 in 2020 (expected to be temporary)

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Total U.S. FDI stock 60% in Europe $3.6 trillion of U.S. global investment (2019)

This overall number, while impressive, does not tell from the United States, the ultimate beneficiary is in us much about the reasons for such investment or Germany. Applying this example to 2017, the year with the countries where U.S. companies focus their the most recent data, official figures from the IMF investments. As we have stated in previous surveys, indicate that FDI in Germany from the United States official statistics blur some important distinctions was around $90 billion, whereas recent research by when it comes to the nature of transatlantic economists at the IMF and University of Copenhagen investment flows. Recent research, however, helps that takes account of these “round tripping” flows us understand better two important phenomena: concludes that the stock of “real FDI” from the United “round-tripping” and “phantom FDI.” States in Germany was actually almost $170 billion.1 Similarly, “real FDI” links from Germany to the United Round-Tripping States are considerably higher than official statistics might indicate. All told, they estimate “real FDI” Round-tripping investments go from an original bilateral links from Germany to the United States to investor, for instance in the United States, to an top $400 billion, whereas official statistics put that ultimate destination in a country such as Germany, but figure closer to $300 billion.2 The same is true for flow first from the United States to an intermediate other important bilateral investment links. Table 1 country such as Luxembourg, and then from shows “real FDI” links both from the United States Luxembourg to Germany. Official statistics record to Great Britain and from Great Britain to the United this as a U.S.-Luxembourg flow or a Luxembourg- States, for instance, to be higher than standard Germany flow. While Luxembourg may derive some measurements indicate. economic benefit from that flow emanating originally

Table 1 Estimated Real U.S.-EU FDI Links ($ Billions)

1,1001100

1,0001000

900900

800800

700700

600600

500500

400400

300300

200200

100100

0 U.S. to Lux. to U.S. U.S. to Ireland to U.S. U.S. to France to U.S. UK to the U.S. UK to the UK to U.S. Lux. to the U.S. Lux. to U.S. to Germany to U.S. U.S. to the Neth. to U.S. the U.S. Neth. to Ireland to the U.S. to Ireland France to the U.S. to France Germany to the U.S. to Germany n Estimated Real" FDI Link n Standard FDI Link (IMF official statistics)

Data for 2017, latest available. Real FDI position: Captures links between ultimate investors and real investments. Source: Jannick Damgaard, Thomas Elkjaer and Niels Johannesen, “What Is Real and What Is Not in the Global FDI Network?” IMF Working Paper WP/19/274, December 2, 2019, p. 40.

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“Phantom” vs. “Real” FDI Bermuda ($0.8 trillion), Singapore ($0.8 trillion) and the Cayman Islands ($0.7 trillion). These are global The second important phenomenon is what figures rather than investments from U.S. companies, economists call “phantom FDI,” or investments that but since U.S. companies are the preeminent foreign pass through special purpose entities that have no investors in Europe one may conclude that these real business activities.3 To understand the nature distinctions roughly apply to U.S. FDI in Europe. of transatlantic investment links it is important to be able to separate phantom FDI from FDI in the In the aggregate, about 54% of America’s total “real” economy. Damgaard, Elkjaer and Johannesen FDI position in Europe was allocated to non-bank estimate that investment in countries such as holding companies in 2019, meaning that less than Poland, Romania, Denmark, Austria and Spain, for half of the $3.6 trillion is invested in “real economy” instance, are mostly genuine FDI investments, while industries such as mining, manufacturing, wholesale investment in countries such as Luxembourg and the trade, finance, and professional and information Netherlands are largely comprised of investments in services (See Box 6.1). Excluding holding companies, corporate shells used to minimize the global tax bills total U.S. FDI stock in Europe amounts to $1.6 trillion of multinational enterprises. They estimate that most – a much smaller figure but still more than 2.5 times of the world’s “phantom FDI” in 2017 was in a small larger than total U.S. investment in the Asia-Pacific group of well-known offshore centers: Luxembourg region (FDI stock of $635 billion excluding holding ($3.8 trillion), the Netherlands ($3.3 trillion), Hong companies). Kong ($1.1 trillion), British Virgin Islands ($0.8 trillion),

Box 6.1 U.S. FDI Outflows to Europe Adjusted for Flows of Holding Companies

U.S. holding companies have been playing an important role in the rise of U.S.-Europe FDI over the years. This has generated considerable political and media attention and is important to understand in order to get a full picture of transatlantic commercial linkages. As of 2019, the last year of available data, nonbank holding companies accounted for $2.8 trillion, or about 47% of the global U.S. outward FDI position of approximately $6 trillion, and 54% of total U.S. FDI stock in the European Union.

As the U.S. Bureau of Economic Analysis (BEA) notes, “The growth in holding company affiliates reflects a variety of factors. Some holding-company affiliates are established primarily to coordinate management and administration activities – such as marketing, distribution, or financing – worldwide or in a particular geographic region. In addition, the presence of holding company affiliates in countries where the effective income tax rate faced by affiliates is relatively low suggests tax considerations may have also played a role in their growth. One consequence of the increasing use of holding companies has been a reduction in the degree to which the U.S. Direct Investment Abroad position (and related flow) estimates reflect the industries and countries in which the production of goods and services by foreign affiliates actually occurs.”

Against this backdrop, total U.S. FDI flows to Europe over the past few years have been in large part driven by flows to holding companies. The countries attracting the most investment in holding companies, not surprisingly, are those with some of the lowest corporate tax rates in Europe, such as the Netherlands, Luxembourg, the UK, and Ireland.

Tables 2a and 2b, drawing on BEA data, reflect the significance of holding companies in the composition of U.S. FDI outflows. European markets have accounted for roughly 58% of total U.S. FDI outflows since 2009. However, when flows to nonbank holding companies are excluded from the data, the share of outflows to markets such as Europe and Other Western Hemisphere declines. In 2019, U.S. FDI flows to holding companies in Europe were negative (-$47 billion), as U.S. companies repatriated a large amount of accumulated foreign earnings. This negative outflow from holding companies nearly offset the positive FDI flows of $56 billion to all other industries in Europe, whether it be manufacturing and wholesale trade or finance and information services. Due to these outflows, U.S. FDI to Europe in 2019 was just $8 billion, down significantly from average outflows prior to U.S. tax reform.

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In the long run, when FDI related to holding companies is stripped from the numbers, the U.S. foreign direct investment position in Europe is not as large as typically reported by the BEA. Nonetheless, Europe remains the top destination of choice among U.S. firms even after the figures are adjusted. Between 2009 and 2019, Europe still accounted for over half of total U.S. FDI outflows when flows from holding companies are removed from the aggregate. Europe’s share was still more than double the share to Asia, underscoring the deep and integrated linkages between the United States and Europe.

Table 2a Total U.S. FDI Outflows, 2009-2019 Table 2b U.S. FDI Outflows Excluding Flows to (% of Total) Nonbank Holding Companies, 2009-2019 (% of Total)

Canada and Mexico 12% 9% Other* 6% Other* Canada and Mexico 14% Africa 2% Middle East Africa 3% Middle East

52% Europe Asia and 16% Pacific 58% Europe Asia and 21% Pacific

3% South America South America 4%

*Includes Central America (excluding Mexico) and Other Western Hemisphere. Source: Bureau of Economic Analysis. Data as of January 2021.

In terms of annual flows of FDI from the United By contrast, U.S. outflows to the Asia-Pacific region States, Europe has historically attracted more than during the first three quarters of 2020 declined half of U.S. investment each year. This trend reversed sharply to $8 billion, compared to $44 billion in 2018 and 2019 due to a major tax overhaul in the during the same period in 2019. Total U.S. global United States, which encouraged U.S. companies to FDI outflows were $101 billion during the first three bring home foreign capital at lower tax rates (See quarters of 2020, compared to $53 billion during Box 5.2). the same period a year earlier. The recovery in U.S. FDI outflows in 2020 was largely due to Ireland, Due to these large-scale repatriations of accumulated where strong negative outflows during the first three foreign earnings by U.S. multinational companies, quarters of 2019 (-$82 billion) turned positive for the U.S. FDI outflows to Europe were negative or near first three quarters of 2020 (+$29 billion). zero over the two-year period from 2018-2019. In the first three quarters of 2020, however, U.S. FDI outflows to Europe increased to $55 billion, once again accounting for roughly half of U.S. global outflows.

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Box 6.2 U.S. Corporate Tax Reform: Impact on FDI Outflows

In December 2017, the United States passed the “Tax Cuts and Jobs Act,” which included several changes to the U.S. taxation of international profits. An important provision of the tax reform bill, which had a material impact on U.S. international investment flows, was the reduced tax rate on U.S. firms’ repatriated earnings. This repatriation tax break, which was expected, led to negative U.S. FDI outflows as companies brought home significant quantities of cash. The sweeping U.S. tax reform package also reduced the corporate tax rate from 35% to 21% and moved the United States towards a “territorial” system, under which profits earned by U.S. foreign affiliates will not be taxed.

Prior to the tax reform, U.S. multinational companies would reinvest their global earnings back into their operations abroad, deferring U.S. taxation of these foreign profits. This strategy, widely adopted by U.S. multinationals, caused reinvested earnings to become the primary source of U.S. FDI flows. Table 3a shows the breakout of U.S. FDI flows to Europe by component, with reinvested earnings making up the bulk of total U.S. investment prior to tax reform.

The cumulative effect of years of companies keeping profits overseas led to a large accumulation of U.S. corporate earnings abroad. When the U.S. government passed corporate tax reform, reducing the tax rate on these earnings, it incentivized companies to tap into the large pile of foreign profits by repatriating the foreign capital. When companies withdraw prior accumulated earnings, this results in negative retained earnings which has a negative overall impact on U.S. FDI outflows. A similar pattern occurred in 2005 after the U.S. Homeland Investment Act introduced a similar tax break for multinational companies.

In the first three years after the change in the U.S. corporate tax code, U.S. repatriations of global earnings are estimated to have totaled approximately $1.6 trillion, or about half of the estimated $3 trillion in funds stockpiled overseas at the end of 2017 ( Table 3b). While these repatriations suppressed FDI outflows from the United States to Europe in recent years, we expect the pace of repatriations to slow, and FDI to continue to recover in the years ahead. However, according to UNCTAD’s January 2019 Investment Trends Monitor, in the long run the shift to a territorial tax system in the United States may lead to “structurally lower reinvested earnings by U.S. multinationals in the future.”

Table 3a U.S. FDI Outflows to Europe by Table 3b U.S. Repatriations of Global Earnings Component (Billions $) (Billions $) Total repatriations: 300 800 $1.6 trillion from 750 Homeland 250 2018-2020 700 Investment Act 200 650 600 of 2004: ~$300 150 550 bn in repatriated 500 100 450 earnings in 2005 50 400 350 0 300 -50 250 200 -100 150 -150 100 50 -200 0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20* n Intra-company debt transactions n Reinvestment of earnings n Parent's net equity investment in affiliates Total FDI outflows to Europe

Source: U.S. Bureau of Economic Analysis. *2020 estimate based on three quarters of data. Data as of January 2021. Source: U.S. Bureau of Economic Analysis. Data as of January 2021.

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These figures illustrate the extremely volatile nature labor force, low corporate tax rates, strong economic of U.S. FDI annual outflows. Table 4 provides a growth, membership in the European Union, and more long-term view of U.S.-European investment pro-business policies. Even when adjusting U.S. ties. As shown in the chart, the share of U.S. FDI FDI figures to take account of flows of U.S. holding in both Germany and France declined sharply this companies, Ireland still ranks as one of the most past decade, with France accounting for just 1.4% attractive places in the world for U.S. businesses. of U.S. FDI flows to Europe from 2010 through the third quarter of 2020. Germany’s share is slightly Just as U.S. firms leverage different states across higher, 2.5%, but still off the levels of previous America, with certain activities sprinkled around decades. However, as mentioned these figures need the Northeast, Midwest, the South and West, U.S. to be interpreted very carefully, since a good deal firms deploy the same strategies across Europe, of original investment from the United States makes leveraging the specific attributes of each country. its way to France and Germany via other countries, Economic activity across the EU is just as distinct and analyses that include “round-tripping” estimates and differentiated by country. Different growth rates, conclude that U.S. FDI that eventually ends up in differing levels of consumption, varying degrees France and Germany remains robust. of wealth, labor force participation rates, financial market development, innovation capabilities, Ireland has become a favored destination for FDI corporate tax rates – all of these factors, and more, among U.S. companies looking to take advantage determine where and when U.S. firms invest in of the country’s flexible and skilled English-speaking Europe.

Table 4 U.S. FDI Outflows to Europe: The Long View (Millions of $, (-) inflows)

1990-1999 2000-2009 2010-3Q2020 $ Aggregate % of Total $ Aggregate % of Total $ Aggregate % of Total Country Total Europe Total Europe Total Europe Europe 465,337 1,149,810 1,433,510 Austria 2,908 0.6% 501 0.0% 10,087 0.7% Belgium 12,028 2.6% 40,120 3.5% 31,925 2.2% Czech Republic 155 0.0% 1,941 0.2% 4,672 0.3% Denmark 2,798 0.6% 5,782 0.5% 11,682 0.8% Finland 1,485 0.3% 1,598 0.1% 289 0.0% France 29,063 6.2% 42,963 3.7% 19,888 1.4% Germany 31,817 6.8% 60,363 5.2% 35,949 2.5% Greece 413 0.1% 943 0.1% -79 0.0% Hungary 2,929 0.6% 1,376 0.1% 1,584 0.1% Ireland 21,369 4.6% 115,085 10.0% 241,994 16.9% Italy 13,825 3.0% 26,462 2.3% 15,818 1.1% Luxembourg 15,912 3.4% 126,989 11.0% 311,249 21.7% Netherlands 70,770 15.2% 295,889 25.7% 315,063 22.0% Norway 4,198 0.9% 4,997 0.4% 7,160 0.5% Poland 2,681 0.6% 4,699 0.4% 3,302 0.2% Portugal 1,993 0.4% 2,212 0.2% 861 0.1% Russia 1,555 0.3% 11,289 1.0% -503 0.0% Spain 11,745 2.5% 28,371 2.5% 15,171 1.1% Sweden 10,783 2.3% 16,974 1.5% -767 -0.1% Switzerland 32,485 7.0% 97,869 8.5% 126,292 8.8% Turkey 1,741 0.4% 5,994 0.5% 7,079 0.5% United Kingdom 175,219 37.7% 237,906 20.7% 281,011 19.6% Other 17,465 2.6% 19,487 1.4% -6,222 -0.4%

Source: Bureau of Economic Analysis. Data as of January 2021.

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TOP A launchpad for U.S. companies 10 European countries among top 20 20 global export platforms

Table 5 underscores this point. The figures show supply chains. Ireland is the number one platform for U.S. affiliate sales from a given country to other U.S. affiliates in the world to reach foreign customers, destinations, or the exports of affiliates per country. with U.S. multinationals using the country’s favorable Of the top twenty global export platforms for U.S. tax policies and strategic location to access the multinationals in the world, ten are located in Europe, larger European market. Switzerland, ranked second, a trend that reflects the intense cross-border trade remains a key export platform and pan-regional and investment linkages of the European Union and distribution hub for U.S. firms. the strategic way U.S. firms leverage their European

Table 5 Global Export Platforms for U.S. Multinationals (U.S. Affiliate Sales From Abroad to Other Destinations*)

1982 1990 2000 2018

Rank Country Value Country Value Country Value Country Value 1 United Kingdom 33,500 United Kingdom 51,350 United Kingdom 94,712 Ireland 351,842

2 Switzerland 27,712 Canada 46,933 Canada 94,296 Switzerland 299,475

3 Canada 25,169 Germany 41,853 Germany 69,522 Singapore 286,866

4 Germany 19,117 Switzerland 38,937 Netherlands 67,852 United Kingdom 209,625

5 Netherlands 15,224 Netherlands 33,285 Singapore 56,961 Netherlands 181,382

6 Belgium 11,924 France 24,782 Switzerland 56,562 Canada 157,476

7 Singapore 11,579 Belgium 21,359 Ireland 51,139 Germany 128,911

8 France 11,255 Singapore 15,074 Mexico 37,407 Belgium 112,588

9 Indonesia 8,289 Hong Kong 9,951 France 35,797 Mexico 101,679

10 Hong Kong 4,474 Italy 9,562 Belgium 32,010 Hong Kong 89,906

11 Italy 3,993 Ireland 9,469 Hong Kong 22,470 China 73,353

12 Australia 3,710 Spain 7,179 Malaysia 16,013 France 60,089

13 Ireland 2,842 Japan 7,066 Sweden 15,736 Australia 38,233 United Arab 14 2,610 Australia 6,336 Italy 14,370 Luxembourg 35,042 Emirates 15 Brazil 2,325 Mexico 5,869 Spain 12,928 Italy 33,131

16 Japan 2,248 Indonesia 5,431 Japan 11,845 Brazil 33,119

17 Malaysia 2,046 Brazil 3,803 Australia 9,370 India 32,554

18 Panama 1,662 Norway 3,565 Brazil 8,987 Spain 30,212

19 Spain 1,635 Malaysia 3,559 China 7,831 Japan 28,180

20 Mexico 1,158 Nigeria 2,641 Norway 6,238 Malaysia 24,946

All Country Total 252,274 All Country Total 398,873 All Country Total 857,907 All Country Total 2,721,519

Source: Bureau of Economic Analysis. Data as of January 2021. *Destination = affiliate sales to third markets and sales to U.S. for majority-owned foreign affiliates.

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On a standalone basis, U.S. affiliates’ exports from outflows. The region’s share of total U.S. FDI during Ireland are greater than most countries’ exports. Such the last decade was 57.3%, which is up from the first is the export-intensity of U.S. affiliates in Ireland and decade of this century as well as from the level of the strategic importance of Ireland to the corporate the 1990s. success of U.S. firms operating in Europe and around the world. Moreover, the UK's exit from the EU may Table 6 Cumulative U.S. FDI Outflows ($Millions) further solidify Ireland’s spot as the number one location for U.S. affiliate exports. Increased barriers Europe to trade, including regulatory checks and rules of All as a % of origin requirements, could cause some companies Decade Countries Europe World to relocate operations to Ireland in search of easier 1950-1959 20,363 3,997 19.6% access to the EU market. 1960-1969 40,634 16,220 39.9% 1970-1979 122,721 57,937 47.2% The UK still plays an important role for U.S. companies as an export platform to the rest of Europe. However, 1980-1989 171,880 94,743 55.1% the introduction of the euro, the Single Market, EU 1990-1999 869,489 465,337 53.5% enlargement and now Brexit have enticed more U.S. 2000-2009 2,056,007 1,149,810 55.9% firms to invest directly in continental member states 2010-2019 2,404,739 1,378,601 57.3% of the EU. The extension of EU production networks and commercial infrastructure throughout a larger Q1-Q3 2020 101,259 54,909 54.2% pan-continental Single Market has shifted the center Source: Bureau of Economic Analysis. of gravity in Europe eastward within the EU, with Data as of January 2021. Brussels playing an important role in economic policies and decision-making. Even after adjusting for FDI flows related to holding companies, Europe remains the favored destination Why Europe Matters of U.S. firms. This runs counter to the fashionable narrative that Corporate America prefers low- What started out as a loosely configured market of cost nations in Asia, Latin America and Africa to six nations (Belgium, France, West Germany, Italy, developed markets like Europe. Luxembourg and the Netherlands) in the late 1950s is now an economic behemoth joined together in a Investing in emerging markets such as China, India Single Market. Indeed, the sum of Europe’s parts is and Brazil remains difficult, with indigenous barriers one of the largest economic entities in the world. In to growth (poor infrastructure, dearth of human nominal U.S. dollar terms, the European Union (plus capital, corruption, etc.) as well as policy headwinds the UK, Norway, Switzerland, and Iceland) accounted (foreign exchange controls, tax preferences favoring for an estimated 22.3% of world output in 2020 – local firms) reducing the overall attractiveness of slightly lower than the U.S. share (24.8%) but greater these markets to multinationals. As shown in Table than that of China (17.2%). Based on purchasing 7, there has been a wide divergence between U.S. power parity figures, Europe’s share was greater FDI to the BRICs (Brazil, Russia, India, China) and than that of the United States but less than that of U.S. FDI to Europe. After a drop in flows to Europe China in 2020. during 2018 and 2019 due to tax reform, investment in Europe in the first three quarters of 2020 started Given its size, Europe remains a key pillar of the to pick up. FDI outflows to Europe were $54 billion global economy and critical component to the for the first three quarters of the year, compared with corporate success of U.S. firms. As Table 6 highlights, just $1.2 billion in flows to China and $2.1 billion in Europe attracts more than half of U.S. aggregate FDI flows to the BRICs.

57.3%

Europe’s share of U.S. FDI during the last decade

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Table 7 U.S. Foreign Direct Investment Outflows to the BRICs vs. Europe* ($ Billions)

240240 220220 200 180180 160 160 140 140 120 120 100 100 80 80 60 60 40 4020 2015 00 -20-20 -40-40 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 Q1-Q3 n Europe n BRICs n China

*Europe does not include flows to Russia. BRICs = Brazil, Russia, India and China. Source: Bureau of Economic Analysis. Data as of January 2021.

In addition to being one of the largest economic Just as the macroeconomic backdrop influences blocs in the world, Europe is also wealthy, and wealth investment decisions, so too do micro factors. matters. Wealth is correlated with highly skilled labor, Country and industry regulations can help or rising per capita incomes, innovation, and a world hamper the foreign activities of U.S. companies, and class R&D infrastructure, among other things. In the greatly influence where U.S. firms invest overseas. aggregate, 15 of the 25 wealthiest nations in the world Think property rights, the ability to obtain credit, are European. Per capita income levels in Europe are regulations governing employment, the time it takes significantly greater than those in India and China, to start a business, contract enforcements, and rules and all of Africa. China’s per capita income of just and regulations concerning cross border trade. These $10,262 in 2019 is well below the per capita income and other metrics influence and dictate the ease of levels of Switzerland ($81,994), the Netherlands doing business, and on this basis many European ($52,331), Finland ($48,783), Germany ($46,445), countries rank as the most attractive in the world. and the European Union average of around $35,000. Meanwhile, India’s per capita GDP was just $2,100 in According to the latest rankings of global 2019, according to figures from the World Bank. competitiveness from the World Economic Forum, six European countries were ranked among the Wealth, in turn, drives consumption. The EU top ten most competitive economies in the world. (including the UK) accounted for about 20% of total As shown in Table 8, over half of the top 30 most global personal consumption expenditures in 2019, competitive economies are European countries. a slightly lower share than that of the United States That said, Europe’s competitiveness is hardly but well above that of China (11%) and India (4%). homogenous. Some nations did not even score in the Gaining access to wealthy consumers is among the top fifty – Romania ranked 51st, Greece ranked 59th, primary reasons why U.S. firms invest overseas, and Croatia ranked 63rd in the 2019 survey. Updated and hence the continued attractiveness of wealthy rankings for 2020 were not available this year due to Europe to American companies. COVID-19 uncertainties.

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Table 8 European Economies are Among the Most Finally, Europe continues to be a world leader when it Competitive in the World comes to innovation and knowledge-based activities. According to the Global Innovation Index for 2020, Global Competitiveness Index 2019 Rankings nine European economies rank among the top 15 most Rank Country innovative countries in the world. The index takes into 1 Singapore account a wide range of factors such as institutions, 2 United States education quality, research & development, information 3 Hong Kong & communication technologies (ICT) infrastructure, and 4 Netherlands more; on these measures, Europe is the most attractive 5 Switzerland region in the world for innovation. Another important 6 Japan measure of knowledge-based capabilities, also highlighted 7 Germany in the report, is science & technology (S&T) intensity – or the 8 Sweden sum of the patent and scientific publication shares divided 9 United Kingdom by the population. By this measure, many European and 10 Denmark U.S. regions have more scientific output per capita than 11 Finland their Asian counterparts. In fact, 16 of the top 30 science 12 Taiwan & technology clusters, ranked by S&T intensity, are located 13 South Korea Europe, 11 in North America, and only 3 are in Asia. 14 Canada 15 France Table 9 Global Innovation Index 2020 16 Australia 17 Norway Overall Global Innovation Index 18 Luxembourg Rank Country 19 New Zealand 1 Switzerland 20 Israel 2 Sweden 21 Austria 3 United States 22 Belgium 4 United Kingdom 23 Spain 5 Netherlands 24 Ireland 6 Denmark 25 United Arab Emirates 7 Finland 26 Iceland 8 Singapore 27 Malaysia 9 Germany 28 China 10 South Korea 29 Qatar 11 Hong Kong, China 30 Italy 12 France Source: World Economic Forum, Global Competitiveness Report 2019. 13 Israel 14 China 15 Ireland The spread between the Netherlands, in fourth place, and Croatia underscores the divergent Science and Technology (S&T) Intensity competitiveness of the EU and highlights the fact that Rank Cluster Name Economy member states exhibit various competitive strengths 1 Cambridge. UK UK and weaknesses. Greece received low marks for its 2 Oxford UK property rights and financial stability, which stand in 3 Eindhoven Belgium/Neth. contrast to Finland’s strong protection of property 4 San Jose-San Fran., CA U.S. rights, macroeconomic stability and transparent 5 Ann Arbor, MI U.S. institutions or Germany’s strong innovation 6 Boston-Cambridge, MA U.S. capability and healthy debt dynamics. Belgium was 7 Daejeon Korea rated positively for macroeconomic stability and 8 Seattle, WA U.S. utility infrastructure; France was highlighted for 9 San Diego, CA U.S. its research and development capabilities as well 10 Lund-Malmö Sweden as its high life expectancy. Switzerland ranked first 11 Raleigh, NC U.S. across several variables, including workforce skills, 12 Grenoble France broadband internet subscriptions and government 13 Lausanne Switz./France policy stability. In other words, the various countries 14 Stockholm Sweden of Europe offer specific micro capabilities and 15 Munich Germany competencies that are relatively lacking in the United Source: Cornell University, INSEAD, and the World Intellectual States and critical to the global success of U.S. firms. Property Organization, Global Innovation Index 2020. Data as of 2020.

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U.S. business contributes to Europe’s R&D expenditures $33 billion

Since R&D expenditures are a key driver of value- forecast, R&D expenditures should fall 4% globally added growth, it is interesting to note that EU- and 7% in Europe, mainly due to a drop in corporate based organizations accounted for about one-fifth revenues caused by the global pandemic. of total global R&D in 2018 in purchasing-power parity terms. That lagged the share of the United Sweden, Switzerland, Austria, Denmark and States and China but exceeded the share of Japan Germany rank among the top countries in terms of and South Korea. Over the past two decades, China R&D spending as a percentage of GDP. All had R&D- has steadily advanced its R&D capabilities, and to-GDP ratios above 3% in 2018, larger than that of is projected to overtake the U.S. as the top R&D the United States (2.8%) and China (2.1%). As shown spender in the world (Table 10). According to R&D in Table 11, a large part of the R&D funding in these Magazine’s updated 2020 Global R&D Funding countries comes from businesses.

Table 10 Global R&D Expenditures and the Rise of China (% of Total)

40%40

35%35

30%30 U.S.

25%25 EU28 China 20%20

15%15

10% 10 Japan South 5%5 Korea Russia 0%0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

R&D share calculated in terms of current purchasing-power parity dollars. Global R&D is a sum of the OECD countries plus Argentina, China, Russia, Singapore, South Africa, Chinese Taipei and other non-OECD EU countries. Source: OECD. Data as of January 2021.

Number of researchers hosted (2018)

2.1 million 1.9 million 1.5 million EU China U.S.

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U.S. corporate affiliates in Europe also play an While U.S. universities remain a top destination for important role in the R&D and innovation climate of foreign students, the UK, Germany and France are the region. These affiliates contributed $33 billion to also notable attractions. In the end, Europe remains Europe’s total expenditures on R&D. among the most competitive regions in the world in terms of science and technology capabilities. The Led by European industry leaders like Roche, U.S. National Science Board has explicitly recognized Novartis, Daimler, Sanofi, and GlaxoSmithKline, EU research performance as strong and marked by Europe remains a leader in a number of cutting-edge pronounced intra-EU collaboration. industries including life sciences, agriculture and food production, automotives, nanotechnology, energy, Adding It All Up and information and communications. Innovation requires talent, and on this basis, Europe is holding Given all the above, Europe remains a key destination its own relative to other parts of the world. Europe for U.S. companies looking to expand their global is the world leader in terms of full-time equivalent footprint. The region remains large, wealthy, richly research staff. Of the world’s total pool of research endowed, open for business, and an innovation personnel, the EU housed 2.1 million researchers in leader in many key global industries. 2018 versus 1.5 million in the United States and 1.9 million in China, according to OECD estimates. Despite the latest trade frictions between the two regions, Europe is expected to remain a critical Finally, Europe is home to one of the most educated and indispensable geographic node in the global workforces in the world. The share of the working age operations of U.S. companies. U.S. companies population with a bachelor’s degree or higher in Ireland view the world through a tripolar lens – a world is the highest in the OECD, at 51%. The comparable encompassing the Americas, Europe and Asia, along figures for Luxembourg, Switzerland, Lithuania, Iceland, with attendant offshoots. In this tripolar world, U.S. Belgium, and the Netherlands are all higher than that of companies are not about to give up on or decamp the United States (currently 38%). from one of the main pillars of the global economy.

Table 11 Annual R&D Spending (% of GDP)

6.06

5.05

4.04

3.03

2.02

1.01

00 Italy Chile Israel Spain China Korea Japan Russia France Mexico Austria Iceland Finland Estonia Canada Norway Sweden Slovenia Portugal Hungary Denmark Germany Colombia Singapore Switzerland Netherlands United States United Czech Republic Czech United Kingdom United n Business Funded R&D n Government Funded R&D n Other (Higher Education, Non-profit, Foreign-Funded) Gray bars indicate that R&D breakdown is not available at the sector level. Source: OECD. Data for 2018.

Endnotes

1 See Jannick Damgaard, Thomas Elkjaer, and Niels Johannesen, “The Rise of Phantom Investments,” IMF Finance & Development, September 2019, https://www. imf.org/external/pubs/ft/fandd/2019/09/the-rise-of-phantom-FDI-in-tax-havens-damgaard.htm; and Jannick Damgaard, Thomas Elkjaer and Niels Johannesen, “What Is Real and What Is Not in the Global FDI Network?” IMF Working Paper WP/19/274, December 2, 2019. 2 Note the dataset used by the authors for their analysis is the IMF Coordinated Direct Investment Survey, which due to differences in measurement, can vary from the figures reported by the U.S. Bureau of Economic Analysis used in the Appendix pages of this study. 3 Ibid.

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Alabama and Europe

61,500 Employment within Alabama, 2018 Jobs Since 2006: +19,400 (+46.1%) Country Employment Japan 22,200 United Kingdom 16,400 2006 2018 Germany 15,700 Canada 14,000 European companies France 9,600 account for On a country basis, U.K. companies operating in Alabama 51% represented 14% of total foreign affiliate employment in of foreign affiliate jobs Alabama, with U.K. multinationals supporting approximately 4,800 more jobs in 2018 than in 2010.

Jobs directly supported by European investment. Total European-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

Sources of Greenfield Foreign Direct Investment (FDI)

Investment Germany 22% of the total Japan 16% South Korea 15% 278 Canada 8% Greenfield Projects France 7% (October 2010 - 0 10 20 30 40 0 60 70 80 September 2020)

Number of Greenfield Projects

Number of projects does not directly translate to value of projects or jobs added. Greenfield FDI is investment in new assets.

Alabama Goods Exports to Europe, 2019 Alabama Goods Imports from Europe, 2019 Trade $6.6 bn $7.2 bn 65% of total exports from Alabama to Europe were Transportation equipment and transportation equipment, reflecting the state's machinery manufactures were the top linkages with European auto manufacturers. product imports from Europe.

Top European Export Markets, 2019 Top European Import Markets, 2019

Country Exports ($ millions) Country Imports ($ millions) Germany 3,140 Germany 3,106 Belgium 565 France 1,460 France 499 United Kingdom 588 Netherlands 460 Italy 235 Austria 381 Hungary 172

Top Ten Exports to Europe, 2019 ($ millions) Top Ten Imports from Europe, 2019 ($ millions)

Transportation Equipment 4,271 Transportation Equipment 3,574

Mining 828 Machinery Manufactures 1,105

Chemical Manufactures 378 Computers & Electronic Prod. 534

Paper Products 261 Chemical Manufactures 483 Elec. Equip., Appliances & Computers & Electronic Prod. 162 Parts 350

Machinery Manufactures 127 Primary Metal Manufactures 308

Wood Products 106 Fabricated Metal Products 300

Fabricated Metal Products 94 Plastic & Rubber Products 130

Waste & Scrap 79 Misc. Manufactures 50

Plastic & Rubber Products 69 Processed Foods 42

0 1 10 100 1,000 10,000 0 1 10 100 1,000 10,000

Sources: Bureau of Economic Analysis; U.S. Census Bureau; U.S. Department of Commerce; SelectUSA.

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Alaska and Europe

6,300 Employment within Alaska, 2018 Jobs Since 2006: +1,300 (+26.0%) Country Employment Canada 5,200 United Kingdom 3,800 2006 2018 Japan 2,300 France 700 European companies Germany 300 account for On a country basis, U.K. companies operating in Alaska 37% represented 22% of total foreign affiliate employment in of foreign affiliate jobs Alaska, with U.K. multinationals supporting approximately 500 fewer jobs in 2018 than in 2010.

Jobs directly supported by European investment. Total European-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

Sources of Greenfield Foreign Direct Investment (FDI)

Investment U.K. 38% of the total Norway 25% 8 Spain 13% Australia 13% Greenfield Projects (October 2010 - UAE 13% September 2020) 0 1 2 3 4 Number of Greenfield Projects

Number of projects does not directly translate to value of projects or jobs added. Greenfield FDI is investment in new assets.

Alaska Goods Exports to Europe, 2019 Alaska Goods Imports from Europe, 2019 Trade $1.2 bn $172.8 m The bulk of the state's exports consist of primary Machinery made up about 23% of total Alaskan imports commodities. from Europe. Other large import categories from Europe include oil & gas, transportation equipment and computer & electronic products. Top European Export Markets, 2019 Top European Import Markets, 2019

Country Exports ($ millions) Country Imports ($ millions) Netherlands 350 Russia 38 Germany 219 United Kingdom 32 Spain 154 Finland 26 Belgium 124 Germany 19 France 77 Italy 8

Top Ten Exports to Europe, 2019 ($ millions) Top Ten Imports from Europe, 2019 ($ millions)

Fish & Marine Products 595 Machinery Manufactures 39

Mining 534 Oil & Gas Extraction 33

Primary Metal Manufactures 25 Transportation Equipment 32

Transportation Equipment 7 Computers & Electronic Prod. 21

Processed Foods 7 Fabricated Metal Products 14 Elec. Equip., Appliances & Machinery Manufactures 3 Parts 10

Computers & Electronic Prod. 1 Chemical Manufactures 6

Waste & Scrap 1 Paper Products 3

Fabricated Metal Products 0.9 Misc. Manufactures 2 Elec. Equip., Appliances & 0.8 Plastic & Rubber Products Parts 2 0 1 10 100 1,000 10,000 0 1 10 100 1,000 10,000

Sources: Bureau of Economic Analysis; U.S. Census Bureau; U.S. Department of Commerce; SelectUSA.

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Arizona and Europe

68,900 Employment within Arizona, 2018 Jobs Since 2006: +21,700 (+46.0%) Country Employment Canada 20,600 United Kingdom 19,900 2006 2018 France 12,600 Japan 10,800 European companies Germany 9,900 account for On a country basis, U.K. companies operating in Arizona 58% represented 17% of total foreign affiliate employment in of foreign affiliate jobs Arizona, with U.K. multinationals supporting approximately 6,800 more jobs in 2018 than in 2010.

Jobs directly supported by European investment. Total European-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

Sources of Greenfield Foreign Direct Investment (FDI)

Investment Canada 16% of the total Germany 12% U.K. 9% 213 Japan 9% Greenfield Projects (October 2010 - Switzerland 7% September 2020) 0 10 20 30 40 Number of Greenfield Projects

Number of projects does not directly translate to value of projects or jobs added. Greenfield FDI is investment in new assets.

Arizona Goods Exports to Europe, 2019 Arizona Goods Imports from Europe, 2019 Trade $4.8 bn $4.6 bn Roughly one-third of the state's exports to Europe Arizona's largest merchandise imports from Europe consist of transportation equipment. were machinery and computers & electronic products, which combined represent about half of the state's total imports from Europe.

Top European Export Markets, 2019 Top European Import Markets, 2019

Country Exports ($ millions) Country Imports ($ millions) United Kingdom 831 Netherlands 1,186 Netherlands 783 Germany 871 Germany 744 United Kingdom 652 France 682 France 454 Ireland 261 Italy 334

Top Ten Exports to Europe, 2019 ($ millions) Top Ten Imports from Europe, 2019 ($ millions)

Transportation Equipment 1,531 Machinery Manufactures 1,381

Computers & Electronic Prod. 1,105 Computers & Electronic Prod. 901 Elec. Equip., Appliances & 344 Transportation Equipment Parts 764 Elec. Equip., Appliances & Fabricated Metal Products 328 Parts 179

Machinery Manufactures 290 Chemical Manufactures 152

Chemical Manufactures 276 Fabricated Metal Products 125

Mining 270 Misc. Manufactures 73 Beverage & Tobacco Misc. Manufactures 251 Products 70

Agricultural Products 67 Non-Metallic Mineral Mfgs. 38

Plastic & Rubber Products 48 Plastic & Rubber Products 28

0 1 10 100 1,000 10,000 0 1 10 100 1,000 10,000

Sources: Bureau of Economic Analysis; U.S. Census Bureau; U.S. Department of Commerce; SelectUSA.

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Arkansas and Europe

28,900 Employment within Arkansas, 2018 Jobs Since 2006: +5,200 (+21.9%) Country Employment Japan 6,500 United Kingdom 6,400 2006 2018 France 6,100 Switzerland 4,800 European companies Canada 4,100 account for On a country basis, U.K. companies operating in Arkansas 60% represented 13% of total foreign affiliate employment in of foreign affiliate jobs Arkansas, with U.K. multinationals supporting approximately 2,700 more jobs in 2018 than in 2010.

Jobs directly supported by European investment. Total European-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

Sources of Greenfield Foreign Direct Investment (FDI)

Investment Germany 22% of the total China 10% Japan 10% 59 France 10% Greenfield Projects India 5% (October 2010 - 0 2 4 6 8 10 12 14 September 2020) Number of Greenfield Projects

Number of projects does not directly translate to value of projects or jobs added. Greenfield FDI is investment in new assets.

Arkansas Goods Exports to Europe, 2019 Arkansas Goods Imports from Europe, 2019 Trade $1.6 bn $2.4 bn Transportation equipment made up 53% of exports Transportation equipment is the top imported product to Europe in 2019. from Europe, representing 63% of total imports.

Top European Export Markets, 2019 Top European Import Markets, 2019

Country Exports ($ millions) Country Imports ($ millions) France 711 France 1,395 Belgium 152 Germany 369 United Kingdom 140 United Kingdom 145 Germany 100 Italy 129 Netherlands 97 Spain 54

Top Ten Exports to Europe, 2019 ($ millions) Top Ten Imports from Europe, 2019 ($ millions)

Transportation Equipment 873 Transportation Equipment 1,549

Chemical Manufactures 199 Machinery Manufactures 225

Paper Products 168 Fabricated Metal Products 125

Plastic & Rubber Products 97 Primary Metal Manufactures 109 Elec. Equip., Appliances & Machinery Manufactures 74 Parts 109

Processed Foods 59 Chemical Manufactures 63 Elec. Equip., Appliances & 33 Computers & Electronic Prod. Parts 48

Fabricated Metal Products 25 Misc. Manufactures 20 Beverage & Tobacco Computers & Electronic Prod. 22 Products 20 Beverage & Tobacco 20 Plastic & Rubber Products Products 19 0 1 10 100 1,000 10,000 0 1 10 100 1,000 10,000

Sources: Bureau of Economic Analysis; U.S. Census Bureau; U.S. Department of Commerce; SelectUSA.

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California and Europe

490,700 Employment within California, 2018 Jobs Since 2006: +145,200 (+42.0%) Country Employment United Kingdom 126,400 Japan 115,200 2006 2018 France 97,300 Germany 85,600 European companies Canada 75,000 account for On a country basis, U.K. companies operating in California 58% represented 15% of total foreign affiliate employment in of foreign affiliate jobs California, with U.K. multinationals supporting approximately 41,900 more jobs in 2018 than in 2010.

Jobs directly supported by European investment. Total European-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

Sources of Greenfield Foreign Direct Investment (FDI)

Investment U.K. 20% of the total Germany 9% 2,532 Canada 8% Greenfield Projects Japan 7% (October 2010 - China 7% September 2020) 0 100 200 300 400 500 600 Number of Greenfield Projects

Number of projects does not directly translate to value of projects or jobs added. Greenfield FDI is investment in new assets.

California Goods Exports to Europe, 2019 California Goods Imports from Europe, 2019 Trade $38.9 bn $45.3 bn 20% of California's exports to Europe in 2019 Transportation equipment was the top product import, consisted of high-tech goods (computers & representing 32% of the state's total imports from electronic products). Europe.

Top European Export Markets, 2019 Top European Import Markets, 2019

Country Exports ($ millions) Country Imports ($ millions) Germany 6,439 Germany 11,309 Netherlands 6,409 United Kingdom 6,259 Belgium 6,341 France 4,819 United Kingdom 5,263 Italy 4,155 France 2,947 Switzerland 2,506

Top Ten Exports to Europe, 2019 ($ millions) Top Ten Imports from Europe, 2019 ($ millions)

Computers & Electronic Prod. 7,907 Transportation Equipment 14,419

Transportation Equipment 7,634 Computers & Electronic Prod. 3,773

Chemical Manufactures 5,105 Machinery Manufactures 3,321

Agricultural Products 3,758 Chemical Manufactures 2,974 Beverage & Tobacco Misc. Manufactures 3,728 Products 2,566

Machinery Manufactures 2,446 Misc. Manufactures 2,152

Used Merchandise 1,752 Processed Foods 1,752 Elec. Equip., Appliances & Petroleum & Coal Products Parts 1,714 1,688

Fabricated Metal Products 907 Used Merchandise 1,429

Primary Metal Manufactures 663 Primary Metal Manufactures 1,394

0 1 10 100 1,000 10,000 100,000 0 1 10 100 1,000 10,000 100,000

Sources: Bureau of Economic Analysis; U.S. Census Bureau; U.S. Department of Commerce; SelectUSA.

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Colorado and Europe

72,900 Employment within Colorado, 2018 Jobs Since 2006: +25,800 (+54.8%) Country Employment United Kingdom 20,900 Canada 19,500 2006 2018 France 10,300 Germany 7,800 European companies Japan 7,800 account for On a country basis, U.K. companies operating in Colorado 60% represented 17% of total foreign affiliate employment in of foreign affiliate jobs Colorado, with U.K. multinationals supporting approximately 7,700 more jobs in 2018 than in 2010.

Jobs directly supported by European investment. Total European-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

Sources of Greenfield Foreign Direct Investment (FDI)

Investment U.K. 15% of the total Canada 14% 229 Germany 9% Greenfield Projects Switzerland 9% (October 2010 - Australia 8% September 2020) 0 10 20 30 40 50 Number of Greenfield Projects

Number of projects does not directly translate to value of projects or jobs added. Greenfield FDI is investment in new assets.

Colorado Goods Exports to Europe, 2019 Colorado Goods Imports from Europe, 2019 Trade $1.8 bn $3.5 bn About 22% of the state's exports to Europe Colorado's largest imports from Europe were machinery consisted of high-tech goods (computers & and transportation equipment. electronic products) in 2019.

Top European Export Markets, 2019 Top European Import Markets, 2019

Country Exports ($ millions) Country Imports ($ millions) Netherlands 331 Switzerland 924 Germany 280 Germany 609 United Kingdom 243 United Kingdom 256 Switzerland 201 Italy 231 France 170 France 227

Top Ten Exports to Europe, 2019 ($ millions) Top Ten Imports from Europe, 2019 ($ millions)

Computers & Electronic Prod. 396 Machinery Manufactures 744

Misc. Manufactures 250 Transportation Equipment 627

Machinery Manufactures 240 Misc. Manufactures 540

Chemical Manufactures 213 Computers & Electronic Prod. 469

Transportation Equipment 181 Chemical Manufactures 224

Mining 142 Fabricated Metal Products 157 Elec. Equip., Appliances & Fabricated Metal Products 91 Parts 138 Elec. Equip., Appliances & Beverage & Tobacco Parts 82 Products 108

Oil & Gas Extraction 48 Plastic & Rubber Products 62

Plastic & Rubber Products 33 Processed Foods 45

0 1 10 100 1,000 10,000 0 1 10 100 1,000 10,000

Sources: Bureau of Economic Analysis; U.S. Census Bureau; U.S. Department of Commerce; SelectUSA.

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Connecticut and Europe

87,900 Employment within Connecticut, 2018 Jobs Since 2006: +10,600 (+13.7%) Country Employment United Kingdom 22,100 Netherlands 18,100 2006 2018 Germany 13,000 Japan 8,000 European companies Switzerland 7,800 account for On a country basis, U.K. companies operating in Connecticut 76% represented 19% of total foreign affiliate employment in of foreign affiliate jobs Connecticut, with U.K. multinationals supporting approximately 3,600 more jobs in 2018 than in 2010.

Jobs directly supported by European investment. Total European-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

Sources of Greenfield Foreign Direct Investment (FDI)

Investment UK 17% of the total Germany 17% 106 Canada 14% Greenfield Projects Italy 6% (October 2010 - France 6% September 2020) 0 5 10 15 20 25 Number of Greenfield Projects

Number of projects does not directly translate to value of projects or jobs added. Greenfield FDI is investment in new assets.

Connecticut Goods Exports to Europe, 2019 Connecticut Goods Imports from Europe, 2019 Trade $8.2 bn $7.0 bn Exports are heavily skewed towards transportation Machinery was Connecticut's main import from equipment, which represent 58% of the state's total Europe, representing 17% of the state's total exports to Europe. merchandise imports from Europe.

Top European Export Markets, 2019 Top European Import Markets, 2019

Country Exports ($ millions) Country Imports ($ millions) Germany 2,542 Germany 1,327 France 1,860 United Kingdom 1,216 United Kingdom 1,452 France 838 Netherlands 775 Netherlands 792 Poland 228 Italy 490

Top Ten Exports to Europe, 2019 ($ millions) Top Ten Imports from Europe, 2019 ($ millions)

Transportation Equipment 4,714 Machinery Manufactures 1,163

Machinery Manufactures 1,154 Petroleum & Coal Products 883

Computers & Electronic Prod. 417 Transportation Equipment 716

Chemical Manufactures 353 Chemical Manufactures 659

Fabricated Metal Products 331 Computers & Electronic Prod. 476 Elec. Equip., Appliances & 260 Misc. Manufactures Parts 472

Misc. Manufactures 137 Fabricated Metal Products 464 Elec. Equip., Appliances & Plastic & Rubber Products 119 Parts 277

Waste & Scrap 84 Primary Metal Manufactures 258 Beverage & Tobacco Used Merchandise 81 Products 224 0 1 10 100 1,000 10,000 0 1 10 100 1,000 10,000

Sources: Bureau of Economic Analysis; U.S. Census Bureau; U.S. Department of Commerce; SelectUSA.

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Delaware and Europe

18,300 Employment within Delaware, 2018 Jobs Since 2006: -400 (-2.1%) Country Employment United Kingdom 7,600 Germany 3,200 2006 2018 Canada 2,400 Netherlands 2,300 European companies France 1,600 account for On a country basis, U.K. companies operating in Delaware 74% represented 31% of total foreign affiliate employment in of foreign affiliate jobs Delaware, with U.K. multinationals supporting approximately 1,800 fewer jobs in 2018 than in 2010.

Jobs directly supported by European investment. Total European-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

Sources of Greenfield Foreign Direct Investment (FDI)

Investment Germany 17% of the total U.K. 11% 52 Switzerland 8% Greenfield Projects India 8% Japan (October 2010 - 6% September 2020) 2 4 6 8 1 12 Number of Greenfield Projects

Number of projects does not directly translate to value of projects or jobs added. Greenfield FDI is investment in new assets.

Delaware Goods Exports to Europe, 2019 Delaware Goods Imports from Europe, 2019 Trade $1.4 bn $5.0 bn Chemicals are Delaware's primary export to Europe, Chemicals are also Delaware's top import, also representing half of the state's total exports. accounting for half of the state's total imports from Europe.

Top European Export Markets, 2019 Top European Import Markets, 2019

Country Exports ($ millions) Country Imports ($ millions) United Kingdom 542 Switzerland 946 Germany 224 Russia 854 Belgium 171 United Kingdom 596 Switzerland 141 France 451 France 137 Kazakhstan 334

Top Ten Exports to Europe, 2019 ($ millions) Top Ten Imports from Europe, 2019 ($ millions)

Chemical Manufactures 715 Chemical Manufactures 2,431

Transportation Equipment 163 Oil & Gas Extraction 1,396

Computers & Electronic Prod. 143 Petroleum & Coal Products 255 Elec. Equip., Appliances & Primary Metal Manufactures 127 Parts 107

Machinery Manufactures 67 Machinery Manufactures 106

Misc. Manufactures 52 Used Merchandise 89

Petroleum & Coal Products 48 Transportation Equipment 82

Used Merchandise 46 Computers & Electronic Prod. 67

Plastic & Rubber Products 38 Processed Foods 60

Processed Foods 15 Primary Metal Manufactures 60

0 1 10 100 1,000 10,000 0 1 10 100 1,000 10,000

Sources: Bureau of Economic Analysis; U.S. Census Bureau; U.S. Department of Commerce; SelectUSA.

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Florida and Europe

229,500 Employment within Florida, 2018 Jobs Since 2006: +69,200 (+43.2%) Country Employment United Kingdom 67,800 Canada 53,500 2006 2018 Germany 39,700 France 37,600 European companies Switzerland 29,100 account for On a country basis, U.K. companies operating in Florida 64% represented 19% of total foreign affiliate employment in of foreign affiliate jobs Florida, with U.K. multinationals supporting approximately 26,200 more jobs in 2018 than in 2010.

Jobs directly supported by European investment. Total European-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

Sources of Greenfield Foreign Direct Investment (FDI)

Investment U.K. 19% of the total Spain 11% Germany 10% 809 Canada 8% Greenfield Projects (October 2010 - France 6% September 2020) 0 0 40 60 80 100 10 140 160 Number of Greenfield Projects

Number of projects does not directly translate to value of projects or jobs added. Greenfield FDI is investment in new assets.

Florida Goods Exports to Europe, 2019 Florida Goods Imports from Europe, 2019 Trade $10.4 bn $22.7 bn Transportation Equipment accounts for about 29% Florida's imports from Europe are concentrated in of Florida's total exports to Europe. transportation equipment, representing a 24% share of the state's total imports from Europe in 2019.

Top European Export Markets, 2019 Top European Import Markets, 2019

Country Exports ($ millions) Country Imports ($ millions) United Kingdom 1,894 Germany 4,022 Germany 1,830 France 3,896 Italy 1,280 United Kingdom 2,770 Netherlands 1,016 Italy 2,355 France 843 Spain 1,482

Top Ten Exports to Europe, 2019 ($ millions) Top Ten Imports from Europe, 2019 ($ millions)

Transportation Equipment 3,063 Transportation Equipment 5,544

Computers & Electronic Prod. 1,331 Chemical Manufactures 2,822

Misc. Manufactures 885 Machinery Manufactures 1,850 Beverage & Tobacco Chemical Manufactures 843 Products 1,660

Machinery Manufactures 701 Computers & Electronic Prod. 1,636

Primary Metal Manufactures 686 Petroleum & Coal Products 871 Elec. Equip., Appliances & Used Merchandise 556 Parts 828 Elec. Equip., Appliances & 408 Non-Metallic Mineral Mfgs. Parts 793

Fabricated Metal Products 381 Misc. Manufactures 779

Wood Products 330 Processed Foods 732

0 1 10 100 1,000 10,000 0 1 10 100 1,000 10,000

Sources: Bureau of Economic Analysis; U.S. Census Bureau; U.S. Department of Commerce; SelectUSA.

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Georgia and Europe

162,300 Employment within Georgia, 2018 Jobs Since 2006: +50,100 (+44.7%) Country Employment Japan 37,900 United Kingdom 37,600 2006 2018 Canada 35,200 Germany 33,400 European companies France 23,300 account for On a country basis, U.K. companies operating in Georgia 58% represented 13% of total foreign affiliate employment in of foreign affiliate jobs Georgia, with U.K. multinationals supporting approximately 14,300 more jobs in 2018 than in 2010.

Jobs directly supported by European investment. Total European-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

Sources of Greenfield Foreign Direct Investment (FDI)

Investment Germany 17% of the total Japan 13% U.K. 10% 615 Canada 7% Greenfield Projects South Korea 6% (October 2010 - September 2020) 0 20 40 60 80 100 120 140 Number of Greenfield Projects

Number of projects does not directly translate to value of projects or jobs added. Greenfield FDI is investment in new assets.

Georgia Goods Exports to Europe, 2019 Georgia Goods Imports from Europe, 2019 Trade $11.3 bn $29.5 bn Over 37% of Georgia's exports to Europe consist of Transportation equipment, chemicals and machinery transportation equipment. manufactures were the top product imports from Europe.

Top European Export Markets, 2019 Top European Import Markets, 2019

Country Exports ($ millions) Country Imports ($ millions) Germany 2,776 Germany 9,500 United Kingdom 1,540 United Kingdom 5,495 Netherlands 1,332 France 2,684 Belgium 789 Italy 2,091 France 691 Ireland 1,218

Top Ten Exports to Europe, 2019 ($ millions) Top Ten Imports from Europe, 2019 ($ millions)

Transportation Equipment 4,204 Transportation Equipment 10,541

Machinery Manufactures 1,290 Chemical Manufactures 5,031

Computers & Electronic Prod. 1,002 Machinery Manufactures 3,642

Misc. Manufactures 875 Computers & Electronic Prod. 1,520

Chemical Manufactures 850 Misc. Manufactures 1,308

Paper Products 714 Fabricated Metal Products 1,118 Elec. Equip., Appliances & Elec. Equip., Appliances & Parts 353 Parts 662 Beverage & Tobacco Used Merchandise 345 Products 527

Fabricated Metal Products 310 Plastic & Rubber Products 515

Wood Products 266 Primary Metal Manufactures 485

0 1 10 100 1,000 10,000 100,000 0 1 10 100 1,000 10,000 100,000

Sources: Bureau of Economic Analysis; U.S. Census Bureau; U.S. Department of Commerce; SelectUSA.

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Hawaii and Europe

13,800 Employment within Hawaii, 2018 Jobs Since 2006: +5,300 (+62.4%) Country Employment Japan 19,400 France 3,800 2006 2018 United Kingdom 2,900 Germany 1,600 European companies Canada 1,400 account for On a country basis, French companies operating in Hawaii 35% represented 10% of total foreign affiliate employment in of foreign affiliate jobs Hawaii, with French multinationals supporting approximately 600 fewer jobs in 2018 than in 2010.

Jobs directly supported by European investment. Total European-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

Sources of Greenfield Foreign Direct Investment (FDI)

Investment Australia 32% of the total Japan 18% 22 France 14% Greenfield Projects Canada 9% (October 2010 - U.K. 9% September 2020) 0 2 4 6 8 Number of Greenfield Projects

Number of projects does not directly translate to value of projects or jobs added. Greenfield FDI is investment in new assets.

Hawaii Goods Exports to Europe, 2019 Hawaii Goods Imports from Europe, 2019 Trade $24.6 m $971.3 m Transportation equipment and computer & Hawaii's top European import category was oil & electronic products led the way as top export gas, which made up 60% of total imports in 2019, categories. followed by transportation equipment.

Top European Export Markets, 2019 Top European Import Markets, 2019

Country Exports ($ millions) Country Imports ($ millions) United Kingdom 10 Russia 580 Germany 3 France 183 Switzerland 2 Italy 51 Netherlands 2 Germany 43 France 2 Switzerland 25

Top Ten Exports to Europe, 2019 ($ millions) Top Ten Imports from Europe, 2019 ($ millions)

Transportation Equipment 10 Oil & Gas Extraction 585

Computers & Electronic Prod. 6 Transportation Equipment 178

Misc. Manufactures 2 Computers & Electronic Prod. 31

Fish & Marine Products 1 Machinery Manufactures 27

Leather & Related Goods 0.9 Misc. Manufactures 26 Beverage & Tobacco Used Merchandise 0.8 Products 21 Beverage & Tobacco 0.6 Leather & Related Goods Products 18 Elec. Equip., Appliances & Animal Production 0.5 Parts 16 Elec. Equip., Appliances & 0.5 Furniture & Related Products Parts 10

Machinery Manufactures 0.4 Fabricated Metal Products 8

0 1 10 100 1,000 10,000 0 1 10 100 1,000 10,000

Sources: Bureau of Economic Analysis; U.S. Census Bureau; U.S. Department of Commerce; SelectUSA.

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Idaho and Europe

12,500 Employment within Idaho, 2018 Jobs Since 2006: +1,800 (+16.8%) Country Employment Canada 3,200 France 2,800 2006 2018 Germany 2,500 United Kingdom 2,200 European companies Switzerland 1,000 account for On a country basis, French companies operating in Idaho 71% represented 16% of total foreign affiliate employment in of foreign affiliate jobs Idaho, with French multinationals supporting approximately 100 more jobs in 2018 than in 2010.

Jobs directly supported by European investment. Total European-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

Sources of Greenfield Foreign Direct Investment (FDI)

Investment Canada 15% of the total Germany 12% 40 France 10% Netherlands 10% Greenfield Projects (October 2010 - Japan 10% September 2020) 0 2 4 6 10 Number of Greenfield Projects

Number of projects does not directly translate to value of projects or jobs added. Greenfield FDI is investment in new assets.

Idaho Goods Exports to Europe, 2019 Idaho Goods Imports from Europe, 2019 Trade $409.3 m $394.7 m Computers & electronic products made up almost Computers & electronic products represented 37% of one-third of total exports to Europe. the state's total imports from Europe.

Top European Export Markets, 2019 Top European Import Markets, 2019

Country Exports ($ millions) Country Imports ($ millions) United Kingdom 111 Germany 75 Netherlands 91 Italy 46 Germany 49 Greece 42 Spain 26 United Kingdom 34 France 20 Netherlands 34

Top Ten Exports to Europe, 2019 ($ millions) Top Ten Imports from Europe, 2019 ($ millions)

Computers & Electronic Prod. 131 Computers & Electronic Prod. 145

Agricultural Products 60 Machinery Manufactures 104 Elec. Equip., Appliances & Machinery Manufactures 49 Parts 25

Processed Foods 37 Agricultural Products 18

Transportation Equipment 29 Fabricated Metal Products 17

Chemical Manufactures 27 Transportation Equipment 16

Misc. Manufactures 23 Chemical Manufactures 12

Fabricated Metal Products 12 Misc. Manufactures 10 Elec. Equip., Appliances & 12 Plastic & Rubber Products Parts 6 Beverage & Tobacco 4 Processed Foods Products 5 0 1 10 100 1,000 10,000 0 1 10 100 1,000 10,000

Sources: Bureau of Economic Analysis; U.S. Census Bureau; U.S. Department of Commerce; SelectUSA.

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Illinois and Europe

240,300 Employment within Illinois, 2018 Jobs Since 2006: +69,000 (+40.3%) Country Employment United Kingdom 75,500 Germany 47,600 2006 2018 Japan 45,100 Canada 37,800 European companies France 33,700 account for On a country basis, U.K. companies operating in Illinois 64% represented 20% of total foreign affiliate employment in of foreign affiliate jobs Illinois, with U.K. multinationals supporting approximately 24,600 more jobs in 2018 than in 2010.

Jobs directly supported by European investment. Total European-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

Sources of Greenfield Foreign Direct Investment (FDI)

Investment U.K. 20% of the total Germany 13% 632 Japan 9% Canada 8% Greenfield Projects (October 2010 - France 6% September 2020) 2 4 6 8 1 12 14 Number of Greenfield Projects

Number of projects does not directly translate to value of projects or jobs added. Greenfield FDI is investment in new assets.

Illinois Goods Exports to Europe, 2019 Illinois Goods Imports from Europe, 2019 Trade $11.5 bn $33.5 bn Chemicals and machinery are top exports, Chemicals, transportation equipment, machinery followed by computers & electronic products and and computers are also the state's top imports from transportation equipment. Europe.

Top European Export Markets, 2019 Top European Import Markets, 2019

Country Exports ($ millions) Country Imports ($ millions) Germany 3,309 Germany 8,246 United Kingdom 1,632 Netherlands 5,518 Netherlands 1,199 France 3,872 Belgium 1,104 Italy 3,659 France 1,006 United Kingdom 3,047

Top Ten Exports to Europe, 2019 ($ millions) Top Ten Imports from Europe, 2019 ($ millions)

Chemical Manufactures 3,215 Chemical Manufactures 7,696

Machinery Manufactures 1,896 Transportation Equipment 4,777

Computers & Electronic Prod. 1,648 Machinery Manufactures 4,538

Transportation Equipment 1,159 Computers & Electronic Prod. 1,832 Elec. Equip., Appliances & 818 Primary Metal Manufactures 1,488 Parts Elec. Equip., Appliances & Fabricated Metal Products 686 1,276 Parts

Misc. Manufactures 363 Fabricated Metal Products 1,163

Waste & Scrap 297 Processed Foods 1,020

Used Merchandise 275 Plastic & Rubber Products 739 Beverage & Tobacco Processed Foods 253 546 Products 0 1 10 100 1,000 10,000 100,000 0 1 10 100 1,000 10,000 100,000

Sources: Bureau of Economic Analysis; U.S. Census Bureau; U.S. Department of Commerce; SelectUSA.

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Indiana and Europe

126,400 Employment within Indiana, 2018 Jobs Since 2006: +28,500 (+29.1%) Country Employment Japan 57,500 United Kingdom 37,500 2006 2018 France 30,700 Germany 18,000 European companies Canada 17,500 account for On a country basis, U.K. companies operating in Indiana 59% represented 17% of total foreign affiliate employment in of foreign affiliate jobs Indiana, with U.K. multinationals supporting approximately 5,900 more jobs in 2018 than in 2010.

Jobs directly supported by European investment. Total European-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

Sources of Greenfield Foreign Direct Investment (FDI)

Investment U.K. 29% of the total Germany 14% 414 Japan 8% Greenfield Projects Canada 7% (October 2010 - France 5% September 2020) 0 20 40 60 80 100 120 140 Number of Greenfield Projects

Number of projects does not directly translate to value of projects or jobs added. Greenfield FDI is investment in new assets.

Indiana Goods Exports to Europe, 2019 Indiana Goods Imports from Europe, 2019 Trade $9.6 bn $29.2 bn Trade in chemicals represented 43% of total exports. Chemicals were also the state's largest import from Europe, representing 63% of total imports.

Top European Export Markets, 2019 Top European Import Markets, 2019

Country Exports ($ millions) Country Imports ($ millions) Germany 1,406 Ireland 9,175 Netherlands 1,397 Denmark 5,934 France 1,387 Germany 4,137 Italy 1,260 France 2,853 Belgium 1,129 Switzerland 2,213

Top Ten Exports to Europe, 2019 ($ millions) Top Ten Imports from Europe, 2019 ($ millions)

Chemical Manufactures 4,098 Chemical Manufactures 18,320

Transportation Equipment 1,740 Transportation Equipment 2,111

Misc. Manufactures 1,302 Misc. Manufactures 2,020

Machinery Manufactures 658 Machinery Manufactures 1,523

Computers & Electronic Prod. 499 Computers & Electronic Prod. 1,210

Plastic & Rubber Products 287 Plastic & Rubber Products 492 Elec. Equip., Appliances & Primary Metal Manufactures Parts 274 410

Primary Metal Manufactures 167 Fabricated Metal Products 309 Elec. Equip., Appliances & Processed Foods 153 Parts 277

Fabricated Metal Products 134 Processed Foods 113

0 1 10 100 1,000 10,000 100,000 0 1 10 100 1,000 10,000 100,000

Sources: Bureau of Economic Analysis; U.S. Census Bureau; U.S. Department of Commerce; SelectUSA.

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Iowa and Europe

34,200 Employment within Iowa, 2018 Jobs Since 2006: +3,400 (+11.0%) Country Employment United Kingdom 7,200 Germany 6,400 2006 2018 Netherlands 5,400 Japan 5,100 European companies Canada 4,200 account for On a country basis, U.K. companies operating in Iowa 57% represented 12% of total foreign affiliate employment in Iowa, of foreign affiliate jobs with U.K. multinationals supporting approximately 900 fewer jobs in 2018 than in 2010.

Jobs directly supported by European investment. Total European-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

Sources of Greenfield Foreign Direct Investment (FDI)

Investment Germany 20% of the total France 8% Italy 8% 60 Netherlands 8% Greenfield Projects (October 2010 - Japan 7% September 2020) 0 2 4 6 8 10 12 14 Number of Greenfield Projects

Number of projects does not directly translate to value of projects or jobs added. Greenfield FDI is investment in new assets.

Iowa Goods Exports to Europe, 2019 Iowa Goods Imports from Europe, 2019 Trade $2.5 bn $2.2 bn Machinery manufactures accounted for 36% of total Machinery manufactures and chemicals were also exports, or roughly $900 million. Chemicals, the the top product imports from Europe. second largest export category, represented less than half of that amount. Top European Export Markets, 2019 Top European Import Markets, 2019

Country Exports ($ millions) Country Imports ($ millions) Germany 513 Germany 700 United Kingdom 315 Italy 302 Netherlands 302 United Kingdom 178 France 284 France 133 Italy 126 Netherlands 128

Top Ten Exports to Europe, 2019 ($ millions) Top Ten Imports from Europe, 2019 ($ millions)

Machinery Manufactures 904 Machinery Manufactures 903

Chemical Manufactures 335 Chemical Manufactures 278 Elec. Equip., Appliances & Computers & Electronic Prod. 271 Parts 185

Mining 263 Fabricated Metal Products 165

Transportation Equipment 261 Computers & Electronic Prod. 152 Elec. Equip., Appliances & 84 Misc. Manufactures Parts 99

Processed Foods 72 Transportation Equipment 88 Beverage & Tobacco 56 Processed Foods Products 69

Fabricated Metal Products 53 Plastic & Rubber Products 59

Misc. Manufactures 47 Primary Metal Manufactures 25

0 1 10 100 1,000 10,000 0 1 10 100 1,000 10,000

Sources: Bureau of Economic Analysis; U.S. Census Bureau; U.S. Department of Commerce; SelectUSA.

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Kansas and Europe

37,200 Employment within Kansas, 2018 Jobs Since 2006: +8,500 (+29.6%) Country Employment Japan 11,500 Canada 9,300 2006 2018 United Kingdom 8,600 Switzerland 7,100 European companies Germany 6,700 account for On a country basis, U.K. companies operating in Kansas 54% represented 12% of total foreign affiliate employment in of foreign affiliate jobs Kansas, with U.K. multinationals supporting approximately 2,800 more jobs in 2018 than in 2010.

Jobs directly supported by European investment. Total European-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

Sources of Greenfield Foreign Direct Investment (FDI)

Investment Germany 16% of the total Canada 10% 89 Japan 9% Greenfield Projects U.K. 8% (October 2010 - France 8% September 2020) 0 2 4 6 8 10 12 14 16 18 Number of Greenfield Projects

Number of projects does not directly translate to value of projects or jobs added. Greenfield FDI is investment in new assets.

Kansas Goods Exports to Europe, 2019 Kansas Goods Imports from Europe, 2019 Trade $2.6 bn $3.1 bn Almost 75% of Kansas's exports to Europe was Transportation equipment represented 28% of the concentrated in four main export categories: state's total imports from Europe. transportation equipment, computer & electronic products, chemicals and machinery.

Top European Export Markets, 2019 Top European Import Markets, 2019

Country Exports ($ millions) Country Imports ($ millions) Germany 508 Germany 927 United Kingdom 463 United Kingdom 513 France 234 Italy 326 Austria 154 France 296 Spain 152 Turkey 133

Top Ten Exports to Europe, 2019 ($ millions) Top Ten Imports from Europe, 2019 ($ millions)

Transportation Equipment 916 Transportation Equipment 880

Computers & Electronic Prod. 405 Machinery Manufactures 622

Chemical Manufactures 320 Chemical Manufactures 315

Machinery Manufactures 270 Computers & Electronic Prod. 232 Elec. Equip., Appliances & 86 Fabricated Metal Products Parts 178 Elec. Equip., Appliances & Agricultural Products 79 Parts 111

Processed Foods 79 Wood Products 52

Fabricated Metal Products 69 Processed Foods 44

Primary Metal Manufactures 64 Misc. Manufactures 43

Misc. Manufactures 63 Plastic & Rubber Products 28

0 1 10 100 1,000 10,000 0 1 10 100 1,000 10,000

Sources: Bureau of Economic Analysis; U.S. Census Bureau; U.S. Department of Commerce; SelectUSA.

101 - THE TRANSATLANTIC ECONOMY 2021 Appendix A - European Commerce and the 50 U.S. States: A State-by-State Comparison

Kentucky and Europe

58,800 Employment within Kentucky, 2018 Jobs Since 2006: +11,100 (+23.3%) Country Employment Japan 43,700 Germany 16,900 2006 2018 France 12,000 Canada 10,500 European companies United Kingdom 9,500 account for On a country basis, German companies operating in Kentucky 43% represented 12% of total foreign affiliate employment of foreign affiliate jobs in Kentucky, with German multinationals supporting approximately 7,400 more jobs in 2018 than in 2010.

Jobs directly supported by European investment. Total European-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

Sources of Greenfield Foreign Direct Investment (FDI)

Investment Japan 28% of the total Germany 13% Canada 9% 268 France 7% Greenfield Projects (October 2010 - UK 6% September 2020) 0 20 40 60 80 100 Number of Greenfield Projects

Number of projects does not directly translate to value of projects or jobs added. Greenfield FDI is investment in new assets.

Kentucky Goods Exports to Europe, 2019 Kentucky Goods Imports from Europe, 2019 Trade $11.8 bn $23.0 bn Reflecting the large presence of automobile Chemical manufactures were the state's largest manufacturers in the state, Kentucky's top export to import, followed by transportation equipment. Europe in 2019 was transportation equipment (65% of total exports). Top European Export Markets, 2019 Top European Import Markets, 2019

Country Exports ($ millions) Country Imports ($ millions) United Kingdom 3,553 Switzerland 4,884 France 3,509 Ireland 4,262 Germany 1,197 Germany 3,098 Netherlands 1,127 France 2,600 Austria 846 Netherlands 1,750

Top Ten Exports to Europe, 2019 ($ millions) Top Ten Imports from Europe, 2019 ($ millions)

Transportation Equipment 7,696 Chemical Manufactures 9,639

Chemical Manufactures 2,120 Transportation Equipment 3,237

Machinery Manufactures 389 Machinery Manufactures 1,766

Computers & Electronic Prod. 358 Computers & Electronic Prod. 988

Misc. Manufactures 335 Misc. Manufactures 467 Beverage & Tobacco 284 Fabricated Metal Products 453 Products Elec. Equip., Appliances & Wood Products 122 334 Parts Beverage & Tobacco Fabricated Metal Products 109 231 Products Elec. Equip., Appliances & 72 Leather & Related Goods 210 Parts

Animal Production 66 Primary Metal Manufactures 182

0 1 10 100 1,000 10,000 100,000 0 1 10 100 1,000 10,000 100,000

Sources: Bureau of Economic Analysis; U.S. Census Bureau; U.S. Department of Commerce; SelectUSA.

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Louisiana and Europe

48,400 Employment within Louisiana, 2018 Jobs Since 2006: +16,800 (+53.2%) Country Employment United Kingdom 17,000 Canada 12,600 2006 2018 France 12,200 Germany 6,800 European companies Netherlands 4,300 account for On a country basis, U.K. companies operating in Louisiana 63% represented 22% of total foreign affiliate employment in of foreign affiliate jobs Louisiana, with U.K. multinationals supporting approximately 5,400 more jobs in 2018 than in 2010.

Jobs directly supported by European investment. Total European-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

Sources of Greenfield Foreign Direct Investment (FDI)

Investment U.K. 24% of the total Canada 10% 137 Germany 10% Greenfield Projects France 7% (October 2010 - Japan 7% September 2020) 0 5 10 15 20 25 30 35 40 Number of Greenfield Projects

Number of projects does not directly translate to value of projects or jobs added. Greenfield FDI is investment in new assets.

Louisiana Goods Exports to Europe, 2019 Louisiana Goods Imports from Europe, 2019 Trade $12.3 bn $8.1 bn The majority of the state's exports consist of a mix Petroleum & coal products were Louisiana's top of energy, agricultural and chemical products. imported good from Europe.

Top European Export Markets, 2019 Top European Import Markets, 2019

Country Exports ($ millions) Country Imports ($ millions) Netherlands 2,999 Russia 3,955 United Kingdom 1,928 United Kingdom 600 Spain 1,783 Germany 599 Belgium 1,210 Belgium 466 France 1,011 Norway 417

Top Ten Exports to Europe, 2019 ($ millions) Top Ten Imports from Europe, 2019 ($ millions)

Petroleum & Coal Products 3,809 Petroleum & Coal Products 3,857

Oil & Gas Extraction 2,761 Chemical Manufactures 1,568

Chemical Manufactures 2,370 Oil & Gas Extraction 698

Agricultural Products 1,837 Machinery Manufactures 491

Processed Foods 426 Primary Metal Manufactures 459

Mining 191 Computers & Electronic Prod. 180

Wood Products 175 Fabricated Metal Products 144

Machinery Manufactures 143 Mining 90 Beverage & Tobacco Fish & Marine Products 99 Products 87 Beverage & Tobacco 89 Transportation Equipment Products 81 0 1 10 100 1,000 10,000 0 1 10 100 1,000 10,000

Sources: Bureau of Economic Analysis; U.S. Census Bureau; U.S. Department of Commerce; SelectUSA.

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Maine and Europe

23,400 Employment within Maine, 2018 Jobs Since 2006: +4,400 Country Employment (+23.2%) Netherlands 17,500* Canada 9,400 United Kingdom 2,600 2006 2018 Switzerland 2,500 Germany 1,700 European companies account for On a country basis, Dutch companies operating in Maine represented 48% of total foreign affiliate employment in Maine, with Dutch multinationals supporting approximately 64% 17,400 more jobs in 2018 than in 2010. of foreign affiliate jobs *Netherlands employment data suppressed to avoid disclosure of individual company data. Range of 10,000 - 24,999 employees given.

Jobs directly supported by European investment. Total European-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

Sources of Greenfield Foreign Direct Investment (FDI)

Investment Canada 39% of the total U.K. 16% 31 Germany 10% Greenfield Projects Switzerland 6% (October 2010 - Australia 6% September 2020) 2 4 6 8 1 12 14 Number of Greenfield Projects

Number of projects does not directly translate to value of projects or jobs added. Greenfield FDI is investment in new assets.

Maine Goods Exports to Europe, 2019 Maine Goods Imports from Europe, 2019 Trade $445.8 m $720.1 m Paper products and transportation equipment are Machinery manufactures represent 20% of the state's top exports to Europe. Maine's total imports from Europe, followed by transportation equipment and petroleum & coal.

Top European Export Markets, 2019 Top European Import Markets, 2019

Country Exports ($ millions) Country Imports ($ millions) Italy 86 Germany 177 Netherlands 67 United Kingdom 91 United Kingdom 64 Italy 58 Germany 58 Netherlands 52 Belgium 40 France 51

Top Ten Exports to Europe, 2019 ($ millions) Top Ten Imports from Europe, 2019 ($ millions)

Paper Products 83 Machinery Manufactures 143

Transportation Equipment 63 Transportation Equipment 110

Computers & Electronic Prod. 57 Petroleum & Coal Products 96

Chemical Manufactures 42 Chemical Manufactures 57

Machinery Manufactures 28 Computers & Electronic Prod. 57

Fish & Marine Products 19 Non-Apparel Textile Products 26

Processed Foods 16 Fabricated Metal Products 22 Elec. Equip., Appliances & 15 Primary Metal Manufactures Parts 20

Plastic & Rubber Products 14 Processed Foods 15

Fabricated Metal Products 11 Plastic & Rubber Products 11

0 1 10 100 1,000 10,000 0 1 10 100 1,000 10,000

Sources: Bureau of Economic Analysis; U.S. Census Bureau; U.S. Department of Commerce; SelectUSA.

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Maryland and Europe

88,700 Employment within Maryland, 2018 Jobs Since 2006: +2,100 (+2.4%) Country Employment United Kingdom 26,300 Netherlands 22,600 2006 2018 Canada 13,500 France 10,700 European companies Germany 9,200 account for On a country basis, U.K. companies operating in Maryland 76% represented 23% of total foreign affiliate employment in of foreign affiliate jobs Maryland, with U.K. multinationals supporting approximately 8,400 more jobs in 2018 than in 2010.

Jobs directly supported by European investment. Total European-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

Sources of Greenfield Foreign Direct Investment (FDI)

Investment U.K. 24% of the total Switzerland 9% 157 Germany 9% Greenfield Projects Israel 8% (October 2010 - France 7% September 2020) 0 5 10 15 20 25 30 35 40 45 Number of Greenfield Projects

Number of projects does not directly translate to value of projects or jobs added. Greenfield FDI is investment in new assets.

Maryland Goods Exports to Europe, 2019 Maryland Goods Imports from Europe, 2019 Trade $4.9 bn $15.6 bn The state's top exports are transportation Transportation equipment and machinery equipment, chemicals, and metal products. manufactures were the top product imports.

Top European Export Markets, 2019 Top European Import Markets, 2019

Country Exports ($ millions) Country Imports ($ millions) France 1,943 United Kingdom 4,402 Netherlands 707 Germany 4,372 United Kingdom 550 Sweden 860 Belgium 420 Italy 826 Germany 331 Finland 665

Top Ten Exports to Europe, 2019 ($ millions) Top Ten Imports from Europe, 2019 ($ millions)

Transportation Equipment 1,355 Transportation Equipment 8,636

Chemical Manufactures 734 Machinery Manufactures 1,796

Fabricated Metal Products 587 Chemical Manufactures 1,075

Computers & Electronic Prod. 454 Primary Metal Manufactures 1,052

Oil & Gas Extraction 445 Computers & Electronic Prod. 503

Mining 217 Paper Products 441 Elec. Equip., Appliances & Beverage & Tobacco 205 Parts Products 308

Primary Metal Manufactures 150 Processed Foods 261

Machinery Manufactures 142 Fabricated Metal Products 230

Waste & Scrap 139 Furniture & Related Products 219

0 1 10 100 1,000 10,000 0 1 10 100 1,000 10,000

Sources: Bureau of Economic Analysis; U.S. Census Bureau; U.S. Department of Commerce; SelectUSA.

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Massachusetts and Europe

167,000 Employment within Massachusetts, 2018 Jobs Since 2006: +47,700 (+40.0%) Country Employment United Kingdom 41,900 Netherlands 36,800 2006 2018 France 25,500 Canada 22,700 European companies Germany 21,300 account for On a country basis, U.K. companies operating in Massachusetts 73% represented 18% of total foreign affiliate employment of foreign affiliate jobs in Massachusetts, with U.K. multinationals supporting approximately 3,600 more jobs in 2018 than in 2010.

Jobs directly supported by European investment. Total European-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

Sources of Greenfield Foreign Direct Investment (FDI)

Investment U.K. 22% of the total France 13% Germany 11% 668 Canada 6% Greenfield Projects Japan 5% (October 2010 - September 2020) 0 20 40 60 80 100 120 140 160 Number of Greenfield Projects

Number of projects does not directly translate to value of projects or jobs added. Greenfield FDI is investment in new assets.

Massachusetts Goods Exports to Europe, 2019 Massachusetts Goods Imports from Europe, 2019 Trade $10.9 bn $12.5 bn Primary metal manufactures were the top export Key imports from Europe include miscellaneous to Europe, followed by computers & electronic manufactured products, chemicals, and computer & products and chemicals. electronic products.

Top European Export Markets, 2019 Top European Import Markets, 2019

Country Exports ($ millions) Country Imports ($ millions) United Kingdom 2,743 Ireland 2,233 Germany 1,834 Germany 1,958 Netherlands 1,329 Italy 1,898 Switzerland 1,092 United Kingdom 1,828 Ireland 710 Switzerland 991

Top Ten Exports to Europe, 2019 ($ millions) Top Ten Imports from Europe, 2019 ($ millions)

Primary Metal Manufactures 2,472 Misc. Manufactures 2,554

Computers & Electronic Prod. 2,043 Chemical Manufactures 2,371

Chemical Manufactures 1,636 Computers & Electronic Prod. 1,540

Misc. Manufactures 1,588 Machinery Manufactures 1,357

Machinery Manufactures 1,186 Petroleum & Coal Products 898 Elec. Equip., Appliances & Beverage & Tobacco 384 Parts Products 369 Elec. Equip., Appliances & Transportation Equipment 383 Parts 341

Waste & Scrap 232 Fish & Marine Products 325

Plastic & Rubber Products 180 Transportation Equipment 325

Fabricated Metal Products 143 Primary Metal Manufactures 215

0 1 10 100 1,000 10,000 0 1 10 100 1,000 10,000

Sources: Bureau of Economic Analysis; U.S. Census Bureau; U.S. Department of Commerce; SelectUSA.

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Michigan and Europe

203,300 Employment within Michigan, 2018 Jobs Since 2006: +62,400 Country Employment (+44.3%) Germany 53,400 United Kingdom 39,500 Netherlands 37,500* 2006 2018 Japan 34,000 Canada 31,800 European companies account for On a country basis, German companies operating in Michigan represented 17% of total foreign affiliate employment 65% in Michigan, with German multinationals supporting of foreign affiliate jobs approximately 27,500 more jobs in 2018 than in 2010. *Netherlands employment data suppressed to avoid disclosure of individual company data. Range of 25,000 - 49,999 employees given.

Jobs directly supported by European investment. Total European-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

Sources of Greenfield Foreign Direct Investment (FDI)

Investment Germany 21% of the total Japan 14% U.K. 10% 527 China 9% Greenfield Projects Canada 8% (October 2010 - September 2020) 0 20 40 60 80 100 120 140 Number of Greenfield Projects

Number of projects does not directly translate to value of projects or jobs added. Greenfield FDI is investment in new assets.

Michigan Goods Exports to Europe, 2019 Michigan Goods Imports from Europe, 2019 Trade $8.3 bn $13.3 bn Not surprisingly, transportation equipment is the Imports from Europe mainly consist of largest exported product, representing 36% of the transportation equipment and machinery. state's total exports to Europe.

Top European Export Markets, 2019 Top European Import Markets, 2019

Country Exports ($ millions) Country Imports ($ millions) Germany 2,047 Germany 4,539 Italy 1,173 Italy 2,662 Belgium 928 Spain 1,220 United Kingdom 904 France 743 Spain 637 United Kingdom 686

Top Ten Exports to Europe, 2019 ($ millions) Top Ten Imports from Europe, 2019 ($ millions)

Transportation Equipment 3,023 Transportation Equipment 4,530

Chemical Manufactures 1,724 Machinery Manufactures 2,624

Non-Metallic Mineral Mfgs. 686 Computers & Electronic Prod. 1,235

Machinery Manufactures 659 Chemical Manufactures 1,029

Computers & Electronic Prod. 452 Fabricated Metal Products 840 Elec. Equip., Appliances & Elec. Equip., Appliances & 365 Parts Parts 681

Primary Metal Manufactures 282 Primary Metal Manufactures 501 Beverage & Tobacco Fabricated Metal Products 263 Products 252

Plastic & Rubber Products 188 Misc. Manufactures 221

Misc. Manufactures 166 Plastic & Rubber Products 216

0 1 10 100 1,000 10,000 0 1 10 100 1,000 10,000

Sources: Bureau of Economic Analysis; U.S. Census Bureau; U.S. Department of Commerce; SelectUSA.

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Minnesota and Europe

94,600 Employment within Minnesota, 2018 Jobs Since 2006: +43,900 (+86.6%) Country Employment Canada 25,400 Germany 21,400 2006 2018 United Kingdom 21,200 Japan 10,500 European companies Switzerland 8,500 account for On a country basis, German companies operating in Minnesota 64% represented 15% of total foreign affiliate employment of foreign affiliate jobs in Minnesota, with German multinationals supporting approximately 12,000 more jobs in 2018 than in 2010.

Jobs directly supported by European investment. Total European-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

Sources of Greenfield Foreign Direct Investment (FDI)

Investment Canada 14% of the total Germany 13% 135 U.K. 13% Greenfield Projects India 6% (October 2010 - Japan 6% September 2020) 0 10 1 20 2 30 Number of Greenfield Projects

Number of projects does not directly translate to value of projects or jobs added. Greenfield FDI is investment in new assets.

Minnesota Goods Exports to Europe, 2019 Minnesota Goods Imports from Europe, 2019 Trade $5.1 bn $4.4 bn Computers & electronic products account for Computers & electronic products were also the roughly one-quarter of Minnesota's exports to state's top import category from Europe. Europe.

Top European Export Markets, 2019 Top European Import Markets, 2019

Country Exports ($ millions) Country Imports ($ millions) Germany 1,126 Germany 1,050 Belgium 609 Ireland 1,013 United Kingdom 556 Italy 452 Ireland 482 United Kingdom 439 France 454 France 241

Top Ten Exports to Europe, 2019 ($ millions) Top Ten Imports from Europe, 2019 ($ millions)

Computers & Electronic Prod. 1,191 Computers & Electronic Prod. 1,297

Misc. Manufactures 972 Machinery Manufactures 964

Machinery Manufactures 713 Misc. Manufactures 402 Elec. Equip., Appliances & Chemical Manufactures 462 Parts 301

Transportation Equipment 399 Chemical Manufactures 262 Elec. Equip., Appliances & 303 Fabricated Metal Products Parts 223

Paper Products 186 Transportation Equipment 200 Beverage & Tobacco Non-Metallic Mineral Mfgs. 183 Products 173

Plastic & Rubber Products 162 Processed Foods 76

Fabricated Metal Products 132 Plastic & Rubber Products 73

0 1 10 100 1,000 10,000 0 1 10 100 1,000 10,000

Sources: Bureau of Economic Analysis; U.S. Census Bureau; U.S. Department of Commerce; SelectUSA.

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Mississippi and Europe

20,100 Employment within Mississippi, 2018 Jobs Since 2006: +7,600 (+60.8%) Country Employment Japan 10,300 France 4,900 2006 2018 United Kingdom 4,600 Germany 4,000 European companies Canada 3,700 account for On a country basis, French companies operating in Mississippi represented 12% of total foreign affiliate employment 51% in Mississippi, with French multinationals supporting of foreign affiliate jobs approximately 2,800 more jobs in 2018 than in 2010.

Jobs directly supported by European investment. Total European-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

Sources of Greenfield Foreign Direct Investment (FDI)

Investment Japan 19% of the total Germany 9% 89 Israel 7% Greenfield Projects France 7% (October 2010 - U.K. 7% September 2020) 0 2 4 6 8 10 12 14 16 18 20 Number of Greenfield Projects

Number of projects does not directly translate to value of projects or jobs added. Greenfield FDI is investment in new assets.

Mississippi Goods Exports to Europe, 2019 Mississippi Goods Imports from Europe, 2019 Trade $2.1 bn $3.9 bn Miscellaneous manufactures represented about 24% Imports from Europe were relatively diverse, with of Mississippi's total exports to Europe in 2019. The seven different product categories each accounting for next largest export category was petroleum & coal, over $200 million worth of European imports in 2019. also accounting for 24% of total exports. Top European Export Markets, 2019 Top European Import Markets, 2019

Country Exports ($ millions) Country Imports ($ millions) Netherlands 531 Germany 676 Belgium 451 Belgium 566 Germany 219 Ireland 522 United Kingdom 159 Russia 451 Turkey 117 United Kingdom 372

Top Ten Exports to Europe, 2019 ($ millions) Top Ten Imports from Europe, 2019 ($ millions)

Misc. Manufactures 498 Petroleum & Coal Products 919

Petroleum & Coal Products 495 Misc. Manufactures 791

Computers & Electronic Prod. 206 Machinery Manufactures 373

Chemical Manufactures 187 Chemical Manufactures 321 Elec. Equip., Appliances & Paper Products 166 Parts 269

Transportation Equipment 140 Transportation Equipment 266

Machinery Manufactures 124 Primary Metal Manufactures 260

Agricultural Products 88 Oil & Gas Extraction 193

Fabricated Metal Products 56 Computers & Electronic Prod. 161 Elec. Equip., Appliances & 33 Fabricated Metal Products Parts 115 0 1 10 100 1,000 10,000 0 1 10 100 1,000 10,000

Sources: Bureau of Economic Analysis; U.S. Census Bureau; U.S. Department of Commerce; SelectUSA.

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Missouri and Europe

89,600 Employment within Missouri, 2018 Jobs Since 2006: +27,900 (+45.2%) Country Employment United Kingdom 21,600 Germany 19,600 2006 2018 Japan 17,200 Canada 16,600 European companies France 11,800 account for On a country basis, U.K. companies operating in Missouri 62% represented 15% of total foreign affiliate employment in of foreign affiliate jobs Missouri, with U.K. multinationals supporting approximately 4,200 more jobs in 2018 than in 2010.

Jobs directly supported by European investment. Total European-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

Sources of Greenfield Foreign Direct Investment (FDI)

Investment Canada 14% of the total U.K. 12% Germany 11% 142 France 7% Greenfield Projects (October 2010 - Ireland 5% September 2020) 0 5 10 15 20 25 Number of Greenfield Projects

Number of projects does not directly translate to value of projects or jobs added. Greenfield FDI is investment in new assets.

Missouri Goods Exports to Europe, 2019 Missouri Goods Imports from Europe, 2019 Trade $2.4 bn $4.1 bn The top exports to Europe from Missouri in 2019 Chemicals, machinery, and beverage & tobacco were chemicals, machinery and computers & products were the top imported goods from Europe. electronic products.

Top European Export Markets, 2019 Top European Import Markets, 2019

Country Exports ($ millions) Country Imports ($ millions) Germany 475 Germany 1,427 Belgium 345 Belgium 391 United Kingdom 331 Italy 361 France 294 United Kingdom 277 Netherlands 231 France 265

Top Ten Exports to Europe, 2019 ($ millions) Top Ten Imports from Europe, 2019 ($ millions)

Chemical Manufactures 1,046 Chemical Manufactures 1,303

Machinery Manufactures 246 Machinery Manufactures 655 Beverage & Tobacco Computers & Electronic Prod. 194 Products 418

Transportation Equipment 149 Transportation Equipment 398 Elec. Equip., Appliances & 113 Fabricated Metal Products Parts 244

Misc. Manufactures 85 Computers & Electronic Prod. 175

Fabricated Metal Products 73 Misc. Manufactures 158 Elec. Equip., Appliances & Leather & Related Goods 72 Parts 155

Plastic & Rubber Products 64 Processed Foods 100

Used Merchandise 62 Plastic & Rubber Products 78

0 1 10 100 1,000 10,000 0 1 10 100 1,000 10,000

Sources: Bureau of Economic Analysis; U.S. Census Bureau; U.S. Department of Commerce; SelectUSA.

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Montana and Europe

4,200 Employment within Montana, 2018 Jobs Since 2006: -1,400 (-25.0%) Country Employment United Kingdom 1,600 Canada 1,500 2006 2018 France 900 Japan 400 European companies Germany 200 account for On a country basis, U.K. companies operating in Montana 46% represented 18% of total foreign affiliate employment in of foreign affiliate jobs Montana, with U.K. multinationals supporting approximately 500 more jobs in 2018 than in 2010.

Jobs directly supported by European investment. Total European-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

Sources of Greenfield Foreign Direct Investment (FDI)

Investment Canada 38% of the total UK 23% 13 South Korea 15% Japan 8% Greenfield Projects (October 2010 - India 8% September 2020) 0 1 2 3 4 5 7 Number of Greenfield Projects

Number of projects does not directly translate to value of projects or jobs added. Greenfield FDI is investment in new assets.

Montana Goods Exports to Europe, 2019 Montana Goods Imports from Europe, 2019 Trade $279.9 m $304.7 m Exports are relatively small and skewed towards Montana's imports from Europe are also small and chemicals, machinery and waste & scrap. heavily concentrated in waste & scrap.

Top European Export Markets, 2019 Top European Import Markets, 2019

Country Exports ($ millions) Country Imports ($ millions) Belgium 110 Germany 213 United Kingdom 41 Switzerland 19 Germany 33 Italy 18 France 19 United Kingdom 11 Netherlands 16 France 10

Top Ten Exports to Europe, 2019 ($ millions) Top Ten Imports from Europe, 2019 ($ millions)

Chemical Manufactures 102 Waste & Scrap 179

Machinery Manufactures 35 Machinery Manufactures 24

Waste & Scrap 34 Computers & Electronic Prod. 24 Elec. Equip., Appliances & 21 Transportation Equipment Parts 17

Mining 20 Used Merchandise 15 Elec. Equip., Appliances & Computers & Electronic Prod. 17 Parts 7

Agricultural Products 13 Fabricated Metal Products 5

Misc. Manufactures 13 Chemical Manufactures 5

Transportation Equipment 10 Leather & Related Goods 4

Used Merchandise 4 Misc. Manufactures 4

0 1 10 100 1,000 10,000 0 1 10 100 1,000 10,000

Sources: Bureau of Economic Analysis; U.S. Census Bureau; U.S. Department of Commerce; SelectUSA.

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Nebraska and Europe

17,100 Employment within Nebraska, 2018 Jobs Since 2006: +6,000 (+54.1%) Country Employment Japan 5,800 United Kingdom 4,100 2006 2018 France 3,600 Germany 2,800 European companies Canada 2,100 account for On a country basis, U.K. companies operating in Nebraska 49% represented 12% of total foreign affiliate employment in of foreign affiliate jobs Nebraska, with U.K. multinationals supporting approximately 1,500 more jobs in 2018 than in 2010.

Jobs directly supported by European investment. Total European-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

Sources of Greenfield Foreign Direct Investment (FDI)

Investment Germany 24% of the total Japan 15% 33 Brazil 6% Greenfield Projects Denmark 6% (October 2010 - Italy 6% September 2020) 2 4 6 8 1 12 Number of Greenfield Projects

Number of projects does not directly translate to value of projects or jobs added. Greenfield FDI is investment in new assets.

Nebraska Goods Exports to Europe, 2019 Nebraska Goods Imports from Europe, 2019 Trade $0.9 bn $1.1 bn The top exports to Europe consist of chemicals, Chemicals represented over half of Nebraska's total machinery, and miscellaneous manufactures. imports from Europe in 2019.

Top European Export Markets, 2019 Top European Import Markets, 2019

Country Exports ($ millions) Country Imports ($ millions) Germany 158 Switzerland 355 France 138 Germany 252 Netherlands 122 United Kingdom 159 Belgium 85 France 82 United Kingdom 66 Italy 56

Top Ten Exports to Europe, 2019 ($ millions) Top Ten Imports from Europe, 2019 ($ millions)

Chemical Manufactures 191 Chemical Manufactures 577

Machinery Manufactures 174 Machinery Manufactures 262

Misc. Manufactures 168 Computers & Electronic Prod. 92

Processed Foods 122 Plastic & Rubber Products 46 Elec. Equip., Appliances & Transportation Equipment 79 Parts 26

Computers & Electronic Prod. 67 Transportation Equipment 22 Elec. Equip., Appliances & 35 Misc. Manufactures Parts 18

Fabricated Metal Products 27 Fabricated Metal Products 17

Plastic & Rubber Products 18 Primary Metal Manufactures 10 Beverage & Tobacco Leather & Related Goods 16 Products 8 0 1 10 100 1,000 10,000 0 1 10 100 1,000 10,000

Sources: Bureau of Economic Analysis; U.S. Census Bureau; U.S. Department of Commerce; SelectUSA.

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Nevada and Europe

29,800 Employment within Nevada, 2018 Jobs Since 2006: +8,900 (+42.6%) Country Employment Canada 9,500 France 8,500 United Kingdom 8,100 2006 2018 Japan 7,200 European companies Germany 3,700 account for On a country basis, French companies operating in Nevada 54% represented 15% of total foreign affiliate employment in of foreign affiliate jobs Nevada, with French multinationals supporting approximately 5,100 more jobs in 2018 than in 2010.

Jobs directly supported by European investment. Total European-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

Sources of Greenfield Foreign Direct Investment (FDI)

Investment Canada 25% of the total U.K. 11% 103 Australia 11% Greenfield Projects Germany 8% (October 2010 - France 7% September 2020) 0 5 10 15 20 25 30 35 Number of Greenfield Projects

Number of projects does not directly translate to value of projects or jobs added. Greenfield FDI is investment in new assets.

Nevada Goods Exports to Europe, 2019 Nevada Goods Imports from Europe, 2019 Trade $2.6 bn $1.8 bn Primary metal manufactures account for over half of Imports from Europe to Nevada are diverse, ranging Nevada's total exports to Europe. from transportation equipment to machinery to computers & electronics.

Top European Export Markets, 2019 Top European Import Markets, 2019

Country Exports ($ millions) Country Imports ($ millions) Switzerland 1,312 France 426 Germany 336 Germany 415 United Kingdom 207 United Kingdom 179 Netherlands 122 Switzerland 158 Spain 119 Italy 116

Top Ten Exports to Europe, 2019 ($ millions) Top Ten Imports from Europe, 2019 ($ millions)

Primary Metal Manufactures 1,326 Transportation Equipment 385

Misc. Manufactures 444 Machinery Manufactures 368

Computers & Electronic Prod. 282 Computers & Electronic Prod. 156

Mining 162 Misc. Manufactures 140

Transportation Equipment 109 Chemical Manufactures 131 Elec. Equip., Appliances & 88 Plastic & Rubber Products Parts 77 Elec. Equip., Appliances & Machinery Manufactures 65 Parts 76 Beverage & Tobacco Fabricated Metal Products 36 Products 60

Chemical Manufactures 34 Fabricated Metal Products 49

Plastic & Rubber Products 15 Used Merchandise 45

0 1 10 100 1,000 10,000 0 1 10 100 1,000 10,000

Sources: Bureau of Economic Analysis; U.S. Census Bureau; U.S. Department of Commerce; SelectUSA.

113 - THE TRANSATLANTIC ECONOMY 2021 Appendix A - European Commerce and the 50 U.S. States: A State-by-State Comparison

New Hampshire and Europe

33,000 Employment within New Hampshire, 2018 Jobs Since 2006: +3,800 Country Employment (+13.0%) United Kingdom 11,900 Netherlands 7,500* Canada 6,300 2006 2018 Japan 5,200 Switzerland 3,900 European companies On a country basis, U.K. companies operating in New account for Hampshire represented 25% of total foreign affiliate employment in New Hampshire, with U.K. multinationals 70% supporting approximately 1,600 more jobs in 2018 than in 2010. of foreign affiliate jobs *Netherlands employment data suppressed to avoid disclosure of individual company data. Range of 5,000 to 9,999 employees given.

Jobs directly supported by European investment. Total European-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

Sources of Greenfield Foreign Direct Investment (FDI)

Investment U.K. 21% of the total Canada 16% 43 Germany 14% Greenfield Projects Switzerland 12% (October 2010 - Sweden 7% September 2020) 0 2 4 6 8 10 12 Number of Greenfield Projects

Number of projects does not directly translate to value of projects or jobs added. Greenfield FDI is investment in new assets.

New Hampshire Goods Exports to Europe, 2019 New Hampshire Goods Imports from Europe, 2019 Trade $2.6 bn $3.1 bn Transportation equipment and chemicals were the Transportation equipment represented 40% of the top two exports to Europe from New Hampshire in state's total imports from Europe. 2019. Combined these two exports made up almost 60% of the state's total exports to Europe. Top European Export Markets, 2019 Top European Import Markets, 2019

Country Exports ($ millions) Country Imports ($ millions) Germany 992 Poland 736 Ireland 484 Germany 701 Netherlands 211 United Kingdom 277 France 211 Italy 255 United Kingdom 159 Ireland 178

Top Ten Exports to Europe, 2019 ($ millions) Top Ten Imports from Europe, 2019 ($ millions)

Transportation Equipment 1,034 Transportation Equipment 1,234

Chemical Manufactures 492 Machinery Manufactures 603

Computers & Electronic Prod. 355 Plastic & Rubber Products 287

Machinery Manufactures 287 Computers & Electronic Prod. 234

Fabricated Metal Products 102 Chemical Manufactures 107 Elec. Equip., Appliances & 97 Fabricated Metal Products Parts 105

Waste & Scrap 56 Misc. Manufactures 95 Elec. Equip., Appliances & Plastic & Rubber Products 38 Parts 89

Printing & Related Products 38 Leather & Related Goods 50

Misc. Manufactures 37 Processed Foods 38

0 1 10 100 1,000 10,000 0 1 10 100 1,000 10,000

Sources: Bureau of Economic Analysis; U.S. Census Bureau; U.S. Department of Commerce; SelectUSA.

114 - THE TRANSATLANTIC ECONOMY 2021 Appendix A - European Commerce and the 50 U.S. States: A State-by-State Comparison

New Jersey and Europe

204,500 Employment within New Jersey, 2018 Jobs Since 2006: +33,700 (+19.7%) Country Employment France 46,200 United Kingdom 40,700 2006 2018 Switzerland 31,300 Germany 30,300 European companies Canada 28,200 account for On a country basis, French companies operating in New 70% Jersey represented 16% of total foreign affiliate employment of foreign affiliate jobs in New Jersey, with French multinationals supporting approximately 16,600 more jobs in 2018 than in 2010.

Jobs directly supported by European investment. Total European-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

Sources of Greenfield Foreign Direct Investment (FDI)

Investment U.K. 14% of the total Japan 10% 322 Germany 9% France 7% Greenfield Projects (October 2010 - India 7% September 2020) 0 10 20 30 40 50 Number of Greenfield Projects

Number of projects does not directly translate to value of projects or jobs added. Greenfield FDI is investment in new assets.

New Jersey Goods Exports to Europe, 2019 New Jersey Goods Imports from Europe, 2019 Trade $11.3 bn $55.3 bn Top exports consist of chemical manufactures and About one-third of New Jersey's imports from computers & electronic products. Europe in 2019 was related to the chemicals industry.

Top European Export Markets, 2019 Top European Import Markets, 2019

Country Exports ($ millions) Country Imports ($ millions) United Kingdom 2,543 Germany 8,544 Germany 1,547 Italy 7,299 Netherlands 1,350 Switzerland 6,838 France 1,049 United Kingdom 5,007 Belgium 838 France 4,341

Top Ten Exports to Europe, 2019 ($ millions) Top Ten Imports from Europe, 2019 ($ millions)

Chemical Manufactures 2,629 Chemical Manufactures 18,622

Computers & Electronic Prod. 1,676 Petroleum & Coal Products 7,025

Waste & Scrap 1,495 Transportation Equipment 4,294

Primary Metal Manufactures 1,075 Processed Foods 3,754

Transportation Equipment 810 Misc. Manufactures 3,312

Used Merchandise 709 Primary Metal Manufactures 2,530 Beverage & Tobacco Misc. Manufactures 578 Products 2,151

Machinery Manufactures 450 Computers & Electronic Prod. 2,020

Petroleum & Coal Products 309 Machinery Manufactures 1,885

Printing & Related Products 241 Leather & Related Goods 1,754

0 1 10 100 1,000 10,000 100,000 0 1 10 100 1,000 10,000 100,000

Sources: Bureau of Economic Analysis; U.S. Census Bureau; U.S. Department of Commerce; SelectUSA.

115 - THE TRANSATLANTIC ECONOMY 2021 Appendix A - European Commerce and the 50 U.S. States: A State-by-State Comparison

New Mexico and Europe

11,600 Employment within New Mexico, 2018 Jobs Since 2006: +3,800 (+48.7%) Country Employment Germany 3,000 Canada 2,800 2006 2018 United Kingdom 2,800 France 2,100 European companies Japan 1,400 account for On a country basis, German companies operating in New 64% Mexico represented 17% of total foreign affiliate employment of foreign affiliate jobs in New Mexico, with German multinationals supporting approximately 300 more jobs in 2018 than in 2010.

Jobs directly supported by European investment. Total European-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

Sources of Greenfield Foreign Direct Investment (FDI)

Investment France 17% of the total Canada 15% Germany 13% 46 Spain 13% Greenfield Projects U.K. 11% (October 2010 - September 2020) 0 2 8 10 Number of Greenfield Projects

Number of projects does not directly translate to value of projects or jobs added. Greenfield FDI is investment in new assets.

New Mexico Goods Exports to Europe, 2019 New Mexico Goods Imports from Europe, 2019 Trade $308.0 m $489.3 m Exports are relatively small, with computers & Chemicals were the largest imported good from electronic products, chemicals, and transportation Europe, followed by computers & electronic equipment the largest export categories for New products. Mexico. Top European Export Markets, 2019 Top European Import Markets, 2019

Country Exports ($ millions) Country Imports ($ millions) Germany 62 Switzerland 152 Ireland 46 Germany 78 Belgium 39 United Kingdom 68 France 29 Ireland 41 United Kingdom 29 France 41

Top Ten Exports to Europe, 2019 ($ millions) Top Ten Imports from Europe, 2019 ($ millions)

Computers & Electronic Prod. 91 Chemical Manufactures 149

Chemical Manufactures 52 Computers & Electronic Prod. 95

Transportation Equipment 38 Machinery Manufactures 69

Agricultural Products 28 Transportation Equipment 41

Fabricated Metal Products 27 Misc. Manufactures 16

Misc. Manufactures 20 Fabricated Metal Products 15 Elec. Equip., Appliances & Machinery Manufactures 15 Parts 14 Elec. Equip., Appliances & Beverage & Tobacco Parts 9 Products 11

Plastic & Rubber Products 9 Primary Metal Manufactures 7

Waste & Scrap 5 Plastic & Rubber Products 6

0 1 10 100 1,000 10,000 0 1 10 100 1,000 10,000

Sources: Bureau of Economic Analysis; U.S. Census Bureau; U.S. Department of Commerce; SelectUSA.

116 - THE TRANSATLANTIC ECONOMY 2021 Appendix A - European Commerce and the 50 U.S. States: A State-by-State Comparison

New York and Europe

357,400 Employment within New York, 2018 Jobs Since 2006: +75,300 (+26.7%) Country Employment United Kingdom 107,300 Canada 59,200 2006 2018 France 58,200 Germany 46,000 European companies Japan 45,400 account for On a country basis, U.K. companies operating in New York 69% represented 21% of total foreign affiliate employment in New of foreign affiliate jobs York, with U.K. multinationals supporting approximately 18,100 more jobs in 2018 than in 2010.

Jobs directly supported by European investment. Total European-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

Sources of Greenfield Foreign Direct Investment (FDI)

Investment U.K. 29% of the total France 8% Canada 8% 1,887 Germany 7% Greenfield Projects (October 2010 - Israel 5% September 2020) 0 100 200 300 400 500 600 Number of Greenfield Projects

Number of projects does not directly translate to value of projects or jobs added. Greenfield FDI is investment in new assets.

New York Goods Exports to Europe, 2019 New York Goods Imports from Europe, 2019 Trade $26.1 bn $45.4 bn Miscellaneous manufactured products and used New York's imports from Europe are relatively merchandise were the top goods exports to diverse, ranging from used and miscellaneous Europe. merchandise to chemicals and computers.

Top European Export Markets, 2019 Top European Import Markets, 2019

Country Exports ($ millions) Country Imports ($ millions) Switzerland 6,179 France 9,470 United Kingdom 5,315 Switzerland 6,369 Belgium 3,365 Germany 6,365 Germany 3,094 Italy 6,130 France 2,181 United Kingdom 5,502

Top Ten Exports to Europe, 2019 ($ millions) Top Ten Imports from Europe, 2019 ($ millions)

Misc. Manufactures 8,393 Used Merchandise 6,720

Used Merchandise 7,211 Chemical Manufactures 4,572

Computers & Electronic Prod. 2,622 Misc. Manufactures 4,541

Chemical Manufactures 1,824 Computers & Electronic Prod. 3,545 Beverage & Tobacco Primary Metal Manufactures 1,315 Products 2,953

Machinery Manufactures 1,061 Primary Metal Manufactures 2,654

Transportation Equipment 1,023 Machinery Manufactures 2,349 Elec. Equip., Appliances & 494 Leather & Related Goods Parts 1,799

Fabricated Metal Products 372 Apparel Manufactures 1,393

Plastic & Rubber Products 269 Transportation Equipment 1,329

0 1 10 100 1,000 10,000 0 1 10 100 1,000 10,000

Sources: Bureau of Economic Analysis; U.S. Census Bureau; U.S. Department of Commerce; SelectUSA.

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North Carolina and Europe

199,200 Employment within North Carolina, 2018 Jobs Since 2006: +45,400 (+29.5%) Country Employment Netherlands 43,300 Germany 42,400 2006 2018 United Kingdom 37,600 Japan 27,000 European companies Canada 21,900 account for On a country basis, Dutch companies operating in North 69% Carolina represented 15% of total foreign affiliate employment of foreign affiliate jobs in North Carolina, with Dutch multinationals supporting approximately 36,400 more jobs in 2018 than in 2010.

Jobs directly supported by European investment. Total European-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

Sources of Greenfield Foreign Direct Investment (FDI)

Investment Germany 21% of the total U.K. 13% Japan 11% 606 Canada 8% Greenfield Projects (October 2010 - Switzerland 6% September 2020) 0 25 50 75 100 125 150 Number of Greenfield Projects

Number of projects does not directly translate to value of projects or jobs added. Greenfield FDI is investment in new assets.

North Carolina Goods Exports to Europe, 2019 North Carolina Goods Imports from Europe, 2019 Trade $9.6 bn $20.6 bn Chemical manufactures account for about 33% of Imports from Europe mainly consist of chemicals, total exports to Europe. machinery and transportation equipment.

Top European Export Markets, 2019 Top European Import Markets, 2019

Country Exports ($ millions) Country Imports ($ millions) France 2,618 Germany 6,028 Netherlands 1,077 France 2,355 Germany 898 Ireland 2,302 Belgium 896 Italy 1,806 United Kingdom 832 United Kingdom 1,630

Top Ten Exports to Europe, 2019 ($ millions) Top Ten Imports from Europe, 2019 ($ millions)

Chemical Manufactures 3,132 Chemical Manufactures 6,772

Transportation Equipment 2,176 Machinery Manufactures 3,339

Machinery Manufactures 881 Transportation Equipment 2,609

Computers & Electronic Prod. 507 Fabricated Metal Products 1,134 Elec. Equip., Appliances & Misc. Manufactures 391 Parts 1,126 Elec. Equip., Appliances & 369 Computers & Electronic Prod. Parts 697

Agricultural Products 308 Misc. Manufactures 640

Primary Metal Manufactures 264 Plastic & Rubber Products 384

Non-Metallic Mineral Mfgs. 230 Primary Metal Manufactures 266

Paper Products 227 Furniture & Related Products 243

0 1 10 100 1,000 10,000 0 1 10 100 1,000 10,000

Sources: Bureau of Economic Analysis; U.S. Census Bureau; U.S. Department of Commerce; SelectUSA.

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North Dakota and Europe

5,100 Employment within North Dakota, 2018 Jobs Since 2006: +1,100 (+27.5%) Country Employment Canada 1,800 United Kingdom 1,600 2006 2018 Japan 1,000 Netherlands 900 European companies France 700 account for On a country basis, U.K. companies operating in North Dakota 37% represented 12% of total foreign affiliate employment in North of foreign affiliate jobs Dakota, with U.K. multinationals supporting approximately 1,000 more jobs in 2018 than in 2010.

Jobs directly supported by European investment. Total European-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

Sources of Greenfield Foreign Direct Investment (FDI)

Investment Canada 40% of the total South Korea 12% 33 Japan 12% Greenfield Projects France 6% (October 2010 - Italy 6% September 2020) 0 2 4 6 10 12 14 16 Number of Greenfield Projects

Number of projects does not directly translate to value of projects or jobs added. Greenfield FDI is investment in new assets.

North Dakota Goods Exports to Europe, 2019 North Dakota Goods Imports from Europe, 2019 Trade $253.8 m $322.2 m 41% of the state's exports to Europe consist of Machinery is North Dakota's primary product import machinery manufactures. from Europe, representing about 54% of total imports.

Top European Export Markets, 2019 Top European Import Markets, 2019

Country Exports ($ millions) Country Imports ($ millions) Germany 58 Germany 109 Czech Republic 27 France 57 United Kingdom 26 Italy 33 Russia 26 United Kingdom 30 France 21 Sweden 16

Top Ten Exports to Europe, 2019 ($ millions) Top Ten Imports from Europe, 2019 ($ millions)

Machinery Manufactures 103 Machinery Manufactures 175

Computers & Electronic Prod. 42 Computers & Electronic Prod. 24 Elec. Equip., Appliances & 32 Waste & Scrap Parts 20

Chemical Manufactures 21 Fabricated Metal Products 19

Agricultural Products 16 Chemical Manufactures 19

Transportation Equipment 11 Transportation Equipment 15 Elec. Equip., Appliances & Fabricated Metal Products 9 Parts 12

Plastic & Rubber Products 7 Paper Products 9

Processed Foods 5 Agricultural Products 8

Misc. Manufactures 3 Plastic & Rubber Products 4

0 1 10 100 1,000 10,000 0 1 10 100 1,000 10,000

Sources: Bureau of Economic Analysis; U.S. Census Bureau; U.S. Department of Commerce; SelectUSA.

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Ohio and Europe

172,800 Employment within Ohio, 2018 Jobs Since 2006: +38,800 (+29.0%) Country Employment Japan 70,100 United Kingdom 49,100 2006 2018 Germany 35,900 Canada 29,100 European companies Switzerland 20,400 account for On a country basis, U.K. companies operating in Ohio 57% represented 16% of total foreign affiliate employment in Ohio, of foreign affiliate jobs with U.K. multinationals supporting approximately 12,500 more jobs in 2018 than in 2010.

Jobs directly supported by European investment. Total European-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

Sources of Greenfield Foreign Direct Investment (FDI)

Investment Japan 22% of the total Germany 13% 480 Canada 9% U.K. 8% Greenfield Projects (October 2010 - France 7% September 2020) 0 20 40 60 80 100 120 Number of Greenfield Projects

Number of projects does not directly translate to value of projects or jobs added. Greenfield FDI is investment in new assets.

Ohio Goods Exports to Europe, 2019 Ohio Goods Imports from Europe, 2019 Trade $9.5 bn $19.2 bn Transportation equipment, chemicals and machinery Chemical manufactures make up 43% of Ohio's are the state's top exports to Europe. imports from Europe.

Top European Export Markets, 2019 Top European Import Markets, 2019

Country Exports ($ millions) Country Imports ($ millions) United Kingdom 2,198 Germany 4,859 France 1,487 Ireland 4,256 Germany 1,440 Italy 2,073 Netherlands 940 France 1,491 Belgium 611 United Kingdom 1,134

Top Ten Exports to Europe, 2019 ($ millions) Top Ten Imports from Europe, 2019 ($ millions)

Transportation Equipment 2,889 Chemical Manufactures 8,206

Chemical Manufactures 1,599 Machinery Manufactures 2,699

Machinery Manufactures 1,267 Transportation Equipment 1,844

Computers & Electronic Prod. 619 Primary Metal Manufactures 1,336

Fabricated Metal Products 481 Computers & Electronic Prod. 998

Primary Metal Manufactures 405 Fabricated Metal Products 596 Elec. Equip., Appliances & Elec. Equip., Appliances & Parts 379 Parts 501

Misc. Manufactures 336 Misc. Manufactures 335

Plastic & Rubber Products 277 Plastic & Rubber Products 327

Non-Metallic Mineral Mfgs. 101 Waste & Scrap 209

0 1 10 100 1,000 10,000 0 1 10 100 1,000 10,000

Sources: Bureau of Economic Analysis; U.S. Census Bureau; U.S. Department of Commerce; SelectUSA.

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Oklahoma and Europe

35,500 Employment within Oklahoma, 2018 Jobs Since 2006: +14,000 (+65.1%) Country Employment United Kingdom 9,600 France 9,200 2006 2018 Canada 7,100 Japan 4,400 European companies Switzerland 3,700 account for On a country basis, U.K. companies operating in Oklahoma 62% represented 17% of total foreign affiliate employment in of foreign affiliate jobs Oklahoma, with U.K. multinationals supporting approximately 3,800 more jobs in 2018 than in 2010.

Jobs directly supported by European investment. Total European-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

Sources of Greenfield Foreign Direct Investment (FDI)

Investment Italy 16% of the total U.K. 16% Canada 14% 58 Germany 10% Greenfield Projects (October 2010 - Australia 9% September 2020) 0 2 4 6 8 10 12 Number of Greenfield Projects

Number of projects does not directly translate to value of projects or jobs added. Greenfield FDI is investment in new assets.

Oklahoma Goods Exports to Europe, 2019 Oklahoma Goods Imports from Europe, 2019 Trade $1.4 bn $1.5 bn The top exports to Europe from Oklahoma Machinery manufactures and transportation include transportation equipment, computers and equipment are the top products imported from machinery. Europe.

Top European Export Markets, 2019 Top European Import Markets, 2019

Country Exports ($ millions) Country Imports ($ millions) Germany 568 Germany 334 Netherlands 258 United Kingdom 257 United Kingdom 200 Italy 218 France 61 France 153 Spain 51 Belgium 70

Top Ten Exports to Europe, 2019 ($ millions) Top Ten Imports from Europe, 2019 ($ millions)

Transportation Equipment 392 Machinery Manufactures 374

Computers & Electronic Prod. 351 Transportation Equipment 205

Machinery Manufactures 265 Fabricated Metal Products 190

Chemical Manufactures 107 Computers & Electronic Prod. 182

Fabricated Metal Products 96 Primary Metal Manufactures 106 Elec. Equip., Appliances & Elec. Equip., Appliances & 86 Parts Parts 64

Misc. Manufactures 23 Chemical Manufactures 56

Primary Metal Manufactures 21 Misc. Manufactures 35

Plastic & Rubber Products 20 Plastic & Rubber Products 33

Processed Foods 14 Fabric Mill Products 31

0 1 10 100 1,000 10,000 0 1 10 100 1,000 10,000

Sources: Bureau of Economic Analysis; Foreign Trade Division, U.S. Census Bureau; U.S. Department of Commerce; SelectUSA.

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Oregon and Europe

47,800 Employment within Oregon, 2018 Jobs Since 2006: +17,500 (+57.8%) Country Employment United Kingdom 14,800 Japan 11,500 2006 2018 Germany 10,900 Switzerland 6,500 European companies Canada 5,800 account for On a country basis, U.K. companies operating in Oregon 67% represented 21% of total foreign affiliate employment in of foreign affiliate jobs Oregon, with U.K. multinationals supporting approximately 6,500 more jobs in 2018 than in 2010.

Jobs directly supported by European investment. Total European-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

Sources of Greenfield Foreign Direct Investment (FDI)

Investment Japan 18% of the total Germany 16% U.K. 12% 116 Australia 10% Greenfield Projects Canada 9% (October 2010 - September 2020) 0 10 1 20 2 30 Number of Greenfield Projects

Number of projects does not directly translate to value of projects or jobs added. Greenfield FDI is investment in new assets.

Oregon Goods Exports to Europe, 2019 Oregon Goods Imports from Europe, 2019 Trade $2.7 bn $4.1 bn Roughly 30% of Oregon's exports to Europe consist Computers & electronic products also represented of computers & electronic products. roughly 30% of Oregon's total European imports.

Top European Export Markets, 2019 Top European Import Markets, 2019

Country Exports ($ millions) Country Imports ($ millions) Germany 503 Netherlands 958 Switzerland 378 Ireland 941 Netherlands 333 Germany 775 United Kingdom 276 Russia 281 France 191 Switzerland 187

Top Ten Exports to Europe, 2019 ($ millions) Top Ten Imports from Europe, 2019 ($ millions)

Computers & Electronic Prod. 749 Computers & Electronic Prod. 1,307

Chemical Manufactures 446 Machinery Manufactures 1,207

Machinery Manufactures 440 Primary Metal Manufactures 327

Transportation Equipment 270 Chemical Manufactures 186 Elec. Equip., Appliances & Misc. Manufactures 209 Parts 178

Primary Metal Manufactures 120 Petroleum & Coal Products 126

Fabricated Metal Products 109 Transportation Equipment 81 Elec. Equip., Appliances & 104 Misc. Manufactures Parts 73

Agricultural Products 69 Fabricated Metal Products 53

Processed Foods 30 Processed Foods 45

0 1 10 100 1,000 10,000 0 1 10 100 1,000 10,000

Sources: Bureau of Economic Analysis; U.S. Census Bureau; U.S. Department of Commerce; SelectUSA.

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Pennsylvania and Europe

232,900 Employment within Pennsylvania, 2018 Jobs Since 2006: +50,400 (+27.6%) Country Employment United Kingdom 60,300 Netherlands 43,100 2006 2018 Germany 38,900 France 29,100 European companies Canada 27,800 account for On a country basis, U.K. companies operating in Pennsylvania 73% represented 19% of total foreign affiliate employment of foreign affiliate jobs in Pennsylvania, with U.K. multinationals supporting approximately 7,700 more jobs in 2018 than in 2010.

Jobs directly supported by European investment. Total European-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

Sources of Greenfield Foreign Direct Investment (FDI)

Investment U.K. 21% of the total Germany 14% Canada 8% 402 France 7% Greenfield Projects (October 2010 - Japan 7% September 2020) 0 10 20 30 40 50 60 70 80 90 100 Number of Greenfield Projects

Number of projects does not directly translate to value of projects or jobs added. Greenfield FDI is investment in new assets.

Pennsylvania Goods Exports to Europe, 2019 Pennsylvania Goods Imports from Europe, 2019 Trade $12.4 bn $36.9 bn Chemicals and primary metals were the state's Imports are heavily concentrated, with chemicals largest exports to Europe. making up over 56% of the state's total imports from Europe.

Top European Export Markets, 2019 Top European Import Markets, 2019

Country Exports ($ millions) Country Imports ($ millions) United Kingdom 2,433 Switzerland 6,570 Netherlands 1,822 Germany 6,159 Belgium 1,799 Italy 4,994 Germany 1,541 Belgium 4,869 France 739 United Kingdom 3,039

Top Ten Exports to Europe, 2019 ($ millions) Top Ten Imports from Europe, 2019 ($ millions)

Chemical Manufactures 3,794 Chemical Manufactures 20,925

Primary Metal Manufactures 1,500 Machinery Manufactures 3,083

Computers & Electronic Prod. 1,085 Oil & Gas Extraction 2,033

Oil & Gas Extraction 953 Primary Metal Manufactures 2,029

Machinery Manufactures 913 Transportation Equipment 1,284

Transportation Equipment 836 Computers & Electronic Prod. 1,248 Elec. Equip., Appliances & Mining 623 Parts 943

Misc. Manufactures 565 Processed Foods 852 Elec. Equip., Appliances & Fabricated Metal Products Parts 382 632

Plastic & Rubber Products 361 Plastic & Rubber Products 601

0 10 1,000 100,000 0 1 10 100 1,000 10,000 100,000

Sources: Bureau of Economic Analysis; U.S. Census Bureau; U.S. Department of Commerce; SelectUSA.

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Rhode Island and Europe

20,900 Employment within Rhode Island, 2018 Jobs Since 2006: +6,500 (+45.1%) Country Employment France 4,700 United Kingdom 4,400 2006 2018 Netherlands 3,750* Japan 2,100 Canada 1,700 European companies On a country basis, French companies operating in Rhode account for Island represented 18% of total foreign affiliate employment in Rhode Island, with French multinationals supporting 80% approximately 600 more jobs in 2018 than in 2010. of foreign affiliate jobs *Netherlands employment data suppressed to avoid disclosure of individual company data. Range of 2,500 - 4,999 employees given.

Jobs directly supported by European investment. Total European-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

Sources of Greenfield Foreign Direct Investment (FDI)

Investment U.K. 16% of the total Japan 13% 32 Canada 9% Greenfield Projects Australia 9% (October 2010 - Israel 6% September 2020) 6 Number of Greenfield Projects

Number of projects does not directly translate to value of projects or jobs added. Greenfield FDI is investment in new assets.

Rhode Island Goods Exports to Europe, 2019 Rhode Island Goods Imports from Europe, 2019 Trade $0.9 bn $5.2 bn Waste & scrap account for over 46% of exports to The top imported product from Europe is Europe. transportation equipment, which represents 68% of the state's total European imports.

Top European Export Markets, 2019 Top European Import Markets, 2019

Country Exports ($ millions) Country Imports ($ millions) Italy 192 Germany 2,208 Germany 141 Slovakia 974 Ireland 114 United Kingdom 380 Turkey 112 Ireland 367 Switzerland 92 Netherlands 243

Top Ten Exports to Europe, 2019 ($ millions) Top Ten Imports from Europe, 2019 ($ millions)

Waste & Scrap 420 Transportation Equipment 3,507

Chemical Manufactures 189 Petroleum & Coal Products 497

Primary Metal Manufactures 58 Misc. Manufactures 435

Misc. Manufactures 45 Machinery Manufactures 175

Computers & Electronic Prod. 44 Fabricated Metal Products 88

Machinery Manufactures 25 Primary Metal Manufactures 81 Elec. Equip., Appliances & 24 Computers & Electronic Prod. Parts 74

Transportation Equipment 23 Chemical Manufactures 49

Fabricated Metal Products 18 Processed Foods 34

Plastic & Rubber Products 13 Non-Metallic Mineral Mfgs. 32

0 1 10 100 1,000 10,000 0 1 10 100 1,000 10,000

Sources: Bureau of Economic Analysis; U.S. Census Bureau; U.S. Department of Commerce; SelectUSA.

124 - THE TRANSATLANTIC ECONOMY 2021 Appendix A - European Commerce and the 50 U.S. States: A State-by-State Comparison

South Carolina and Europe

110,300 Employment within South Carolina, 2018 Jobs Since 2006: +26,100 (+31.0%) Country Employment Germany 35,300 France 26,200 2006 2018 Canada 18,000 Japan 16,300 European companies United Kingdom 12,900 account for On a country basis, German companies operating in South 70% Carolina represented 22% of total foreign affiliate employment of foreign affiliate jobs in South Carolina, with German multinationals supporting approximately 16,000 more jobs in 2018 than in 2010.

Jobs directly supported by European investment. Total European-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

Sources of Greenfield Foreign Direct Investment (FDI)

Investment Germany 29% of the total Canada 10% Japan 8% 449 U.K. 6% Greenfield Projects (October 2010 - China 6% September 2020)) 2 4 6 8 1 12 14 Number of Greenfield Projects

Number of projects does not directly translate to value of projects or jobs added. Greenfield FDI is investment in new assets.

South Carolina Goods Exports to Europe, 2019 South Carolina Goods Imports from Europe, 2019 Trade $12.5 bn $16.8 bn 71% of the state's exports consist of transportation Transportation equipment was also the top imported equipment, reflecting the state's deep linkages with product from Europe, making up 24% of the state's European auto manufacturers. total European imports.

Top European Export Markets, 2019 Top European Import Markets, 2019

Country Exports ($ millions) Country Imports ($ millions) Germany 4,488 Germany 6,835 United Kingdom 2,069 United Kingdom 1,248 Belgium 1,286 France 972 Netherlands 1,051 Austria 950 Spain 809 Italy 834

Top Ten Exports to Europe, 2019 ($ millions) Top Ten Imports from Europe, 2019 ($ millions)

Transportation Equipment 8,884 Transportation Equipment 3,958

Chemical Manufactures 964 Machinery Manufactures 3,230

Machinery Manufactures 548 Chemical Manufactures 2,493

Computers & Electronic Prod. 467 Computers & Electronic Prod. 1,271

Fabricated Metal Products 369 Fabricated Metal Products 1,230 Elec. Equip., Appliances & Plastic & Rubber Products 294 Parts 1,102

Paper Products 288 Plastic & Rubber Products 681

Processed Foods 152 Primary Metal Manufactures 591 Elec. Equip., Appliances & 123 Waste & Scrap Parts 269

Waste & Scrap 86 Petroleum & Coal Products 241

0 1 10 100 1,000 10,000 0 1 10 100 1,000 10,000

Sources: Bureau of Economic Analysis; U.S. Census Bureau; U.S. Department of Commerce; SelectUSA.

125 - THE TRANSATLANTIC ECONOMY 2021 Appendix A - European Commerce and the 50 U.S. States: A State-by-State Comparison

South Dakota and Europe

5,600 Employment within South Dakota, 2018 Jobs Since 2006: +2,400 (+75.0%) Country Employment Canada 2,800 United Kingdom 1,600 France 1,400 2006 2018 Germany 1,100 European companies Switzerland 400 account for On a country basis, U.K. companies operating in South 40% Dakota represented 11% of total foreign affiliate employment of foreign affiliate jobs in South Dakota, with U.K. multinationals supporting approximately 100 more jobs in 2018 than in 2010.

Jobs directly supported by European investment. Total European-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

Sources of Greenfield Foreign Direct Investment (FDI)

Investment Canada 18% of the total Germany 14% Netherlands 14% 22 France 9% Greenfield Projects (October 2010 - Hong Kong 9% September 2020) 1 2 4 Number of Greenfield Projects

Number of projects does not directly translate to value of projects or jobs added. Greenfield FDI is investment in new assets.

South Dakota Goods Exports to Europe, 2019 South Dakota Goods Imports from Europe, 2019 Trade $159.9 m $165.1 m Machinery manufactures are the state's top export Machinery manufactures, computers & electronic to Europe. products, and processed foods make up the bulk of imports from Europe.

Top European Export Markets, 2019 Top European Import Markets, 2019

Country Exports ($ millions) Country Imports ($ millions) Germany 44 Germany 42 Belgium 31 Italy 25 United Kingdom 23 Netherlands 20 Ukraine 13 United Kingdom 12 Netherlands 9 Switzerland 9

Top Ten Exports to Europe, 2019 ($ millions) Top Ten Imports from Europe, 2019 ($ millions)

Machinery Manufactures 48 Machinery Manufactures 69

Computers & Electronic Prod. 27 Computers & Electronic Prod. 20

Paper Products 17 Processed Foods 11

Transportation Equipment 16 Fabric Mill Products 11 Elec. Equip., Appliances & Chemical Manufactures 14 Parts 7 Elec. Equip., Appliances & 8 Chemical Manufactures Parts 6

Plastic & Rubber Products 7 Fabricated Metal Products 5

Fabric Mill Products 6 Transportation Equipment 5

Printing & Related Products 5 Animal Production 4

Misc. Manufactures 5 Plastic & Rubber Products 4

0 1 10 100 1,000 10,000 0 1 10 100 1,000 10,000

Sources: Bureau of Economic Analysis; U.S. Census Bureau; U.S. Department of Commerce; SelectUSA.

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Tennessee and Europe

113,500 Employment within Tennessee, 2018 Jobs Since 2006: +38,800 (+51.9%) Country Employment Japan 47,500 United Kingdom 23,700 2006 2018 Germany 22,800 France 19,200 European companies Canada 15,400 account for On a country basis, U.K. companies operating in Tennessee 57% represented 12% of total foreign affiliate employment in of foreign affiliate jobs Tennessee, with U.K. multinationals supporting approximately 3,800 more jobs in 2018 than in 2010.

Jobs directly supported by European investment. Total European-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

Sources of Greenfield Foreign Direct Investment (FDI)

Investment Japan 23% of the total Germany 15% Canada 13% 376 U.K. 10% Greenfield Projects France 5% (October 2010 - September 2020) 0 10 20 0 40 50 60 70 80 90 Number of Greenfield Projects

Number of projects does not directly translate to value of projects or jobs added. Greenfield FDI is investment in new assets.

Tennessee Goods Exports to Europe, 2019 Tennessee Goods Imports from Europe, 2019 Trade $6.8 bn $20.4 bn Miscellaneous manufactured goods and chemicals Chemicals are the top imported good, comprising are the largest export categories to Europe. over half of the state's total imports from Europe.

Top European Export Markets, 2019 Top European Import Markets, 2019

Country Exports ($ millions) Country Imports ($ millions) Netherlands 1,315 Ireland 7,813 Germany 1,119 Germany 4,023 United Kingdom 1,010 United Kingdom 1,878 Belgium 985 Italy 1,543 Italy 593 Switzerland 944

Top Ten Exports to Europe, 2019 ($ millions) Top Ten Imports from Europe, 2019 ($ millions)

Misc. Manufactures 1,466 Chemical Manufactures 11,580

Chemical Manufactures 1,229 Machinery Manufactures 1,824

Transportation Equipment 988 Computers & Electronic Prod. 1,526

Computers & Electronic Prod. 887 Misc. Manufactures 1,428

Waste & Scrap 438 Transportation Equipment 852 Elec. Equip., Appliances & Fabricated Metal Products Parts 427 721 Elec. Equip., Appliances & Machinery Manufactures 324 Parts 484 Beverage & Tobacco Waste & Scrap Products 267 451

Fabricated Metal Products 136 Plastic & Rubber Products 248

Agricultural Products 129 Primary Metal Manufactures 109

0 10 1,000 100,000 0 1 10 100 1,000 10,000 100,000

Sources: Bureau of Economic Analysis; U.S. Census Bureau; U.S. Department of Commerce; SelectUSA.

127 - THE TRANSATLANTIC ECONOMY 2021 Appendix A - European Commerce and the 50 U.S. States: A State-by-State Comparison

Texas and Europe

401,500 Employment within Texas, 2018 Jobs Since 2006: +165,600 (+70.2%) Country Employment United Kingdom 119,900 Japan 75,300 2006 2018 France 64,400 Germany 60,400 European companies Canada 56,700 account for On a country basis, U.K. companies operating in Texas 60% represented 18% of total foreign affiliate employment in of foreign affiliate jobs Texas, with U.K. multinationals supporting approximately 49,300 more jobs in 2018 than in 2010.

Jobs directly supported by European investment. Total European-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

Sources of Greenfield Foreign Direct Investment (FDI)

Investment U.K. 21% of the total Germany 10% Canada 9% 1,440 Japan 8% Greenfield Projects (October 2010 - France 5% September 2020) 0 50 100 150 200 250 300 350 Number of Greenfield Projects

Number of projects does not directly translate to value of projects or jobs added. Greenfield FDI is investment in new assets.

Texas Goods Exports to Europe, 2019 Texas Goods Imports from Europe, 2019 Trade $52.5 bn $42.9 bn Oil and gas exports to Europe have soared in recent Transportation equipment and chemicals are the top years, due to the shale revolution in the Permian product imports, though total imports are relatively Basin and the opening up of U.S. export markets. diverse with petroleum & coal and machinery also key imports. Top European Export Markets, 2019 Top European Import Markets, 2019

Country Exports ($ millions) Country Imports ($ millions) Netherlands 11,595 Germany 8,034 United Kingdom 9,618 United Kingdom 5,502 France 4,678 Italy 3,931 Germany 4,535 Russia 3,880 Italy 4,109 France 3,306

Top Ten Exports to Europe, 2019 ($ millions) Top Ten Imports from Europe, 2019 ($ millions)

Oil & Gas Extraction 22,700 Transportation Equipment 8,246

Chemical Manufactures 8,360 Chemical Manufactures 6,168

Computers & Electronic Prod. 4,942 Petroleum & Coal Products 5,453

Transportation Equipment 3,930 Machinery Manufactures 5,028

Petroleum & Coal Products 3,105 Computers & Electronic Prod. 3,967

Machinery Manufactures 2,880 Primary Metal Manufactures 2,550 Elec. Equip., Appliances & Fabricated Metal Products Parts 1,316 1,936 Elec. Equip., Appliances & Misc. Manufactures 1,235 Parts 1,407 Beverage & Tobacco Fabricated Metal Products 1,058 Products 1,325

Primary Metal Manufactures 486 Misc. Manufactures 999

0 10 1,000 100,000 0 1 10 100 1,000 10,000 100,000

Sources: Bureau of Economic Analysis; U.S. Census Bureau; U.S. Department of Commerce; SelectUSA.

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Utah and Europe

33,200 Employment within Utah, 2018 Jobs Since 2006: +6,300 (+23.4%) Country Employment United Kingdom 10,700 France 5,500 2006 2018 Germany 5,200 Switzerland 3,400 European companies Canada 3,200 account for On a country basis, U.K. companies operating in Utah 66% represented 21% of total foreign affiliate employment in Utah, of foreign affiliate jobs with U.K. multinationals supporting approximately 4,900 more jobs in 2018 than in 2010.

Jobs directly supported by European investment. Total European-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

Sources of Greenfield Foreign Direct Investment (FDI)

Investment U.K. 19% of the total Australia 11% Sweden 9% 67 Germany 9% Greenfield Projects (October 2010 - Switzerland 9% September 2020) 0 2 4 6 8 10 12 Number of Greenfield Projects

Number of projects does not directly translate to value of projects or jobs added. Greenfield FDI is investment in new assets.

Utah Goods Exports to Europe, 2019 Utah Goods Imports from Europe, 2019 Trade $11.0 bn $1.6 bn Primary metals dominate the state's exports to Imports are much more diversified than exports. Europe, representing over 80% of Utah's total Machinery, computers & electronic products, and exports. chemicals are the state's top imports from Europe.

Top European Export Markets, 2019 Top European Import Markets, 2019

Country Exports ($ millions) Country Imports ($ millions) United Kingdom 8,752 Germany 299 Netherlands 486 France 213 Switzerland 403 United Kingdom 141 Germany 401 Italy 134 France 215 Austria 118

Top Ten Exports to Europe, 2019 ($ millions) Top Ten Imports from Europe, 2019 ($ millions)

Primary Metal Manufactures 8,875 Machinery Manufactures 276

Misc. Manufactures 373 Computers & Electronic Prod. 214

Transportation Equipment 346 Chemical Manufactures 204

Chemical Manufactures 340 Misc. Manufactures 185

Computers & Electronic Prod. 298 Transportation Equipment 135 Elec. Equip., Appliances & Fabricated Metal Products Parts 221 84 Elec. Equip., Appliances & Mining 135 Parts 63

Machinery Manufactures 126 Leather & Related Goods 50

Processed Foods 94 Plastic & Rubber Products 50

Plastic & Rubber Products 53 Processed Foods 33

0 1 10 100 1,000 10,000 0 1 10 100 1,000 10,000

Sources: Bureau of Economic Analysis; U.S. Census Bureau; U.S. Department of Commerce; SelectUSA.

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Vermont and Europe

8,300 Employment within Vermont, 2018 Jobs Since 2006: +1,600 Country Employment (+23.9%) Netherlands 3,750* Canada 1,800 France 1,400 Switzerland 900 2006 2018 United Kingdom 750*

European companies On a country basis, Dutch companies operating in Vermont represented 33% of total foreign affiliate employment account for in Vermont, with Dutch multinationals supporting 74% approximately 3,250 more jobs in 2018 than in 2010. *Netherlands and U.K. employment data suppressed to avoid disclosure of of foreign affiliate jobs individual company data. Range of 2,500 - 4,999 employees given for the Netherlands; 500-999 employees for the U.K.)

Jobs directly supported by European investment. Total European-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

Sources of Greenfield Foreign Direct Investment (FDI)

Investment Canada 36% of the total Switzerland 14% UAE 7% 14 South Korea 7% Greenfield Projects (October 2010 - U.K. 7% September 2020) 1 2 3 4 5 6 Number of Greenfield Projects

Number of projects does not directly translate to value of projects or jobs added. Greenfield FDI is investment in new assets.

Vermont Goods Exports to Europe, 2019 Vermont Goods Imports from Europe, 2019 Trade $457.3 m $437.0 m About 38% of exports consist of computers & Computers & electronics are also the state's top import electronic products. from Europe, also representing roughly 38% of the total goods imported from Europe.

Top European Export Markets, 2019 Top European Import Markets, 2019

Country Exports ($ millions) Country Imports ($ millions) Germany 98 France 122 United Kingdom 94 Germany 84 Netherlands 84 United Kingdom 41 France 48 Italy 30 Estonia 24 Russia 27

Top Ten Exports to Europe, 2019 ($ millions) Top Ten Imports from Europe, 2019 ($ millions)

Computers & Electronic Prod. 174 Computers & Electronic Prod. 162

Misc. Manufactures 84 Machinery Manufactures 62

Machinery Manufactures 51 Fabricated Metal Products 34

Transportation Equipment 34 Processed Foods 32

Chemical Manufactures 26 Plastic & Rubber Products 31

Plastic & Rubber Products 25 Chemical Manufactures 22 Elec. Equip., Appliances & Misc. Manufactures Parts 21 13

Fabric Mill Products 7 Transportation Equipment 11

Furniture & Related Products 5 Non-Metallic Mineral Mfgs. 9 Elec. Equip., Appliances & Fabricated Metal Products 5 Parts 8 0 1 10 100 1,000 10,000 0 1 10 100 1,000 10,000

Sources: Bureau of Economic Analysis; U.S. Census Bureau; U.S. Department of Commerce; SelectUSA.

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Virginia and Europe

153,100 Employment within Virginia, 2018 Jobs Since 2006: +40,800 (+36.3%) Country Employment United Kingdom 41,200 Netherlands 31,300 2006 2018 Germany 23,200 Canada 18,200 European companies France 17,100 account for On a country basis, U.K. companies operating in Virginia 73% represented 20% of total foreign affiliate employment in of foreign affiliate jobs Virginia, with U.K. multinationals supporting approximately 12,900 more jobs in 2018 than in 2010.

Jobs directly supported by European investment. Total European-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

Sources of Greenfield Foreign Direct Investment (FDI)

Investment U.K. 14% of the total Germany 12% Japan 10% 307 Canada 10% Greenfield Projects Switzerland 7% (October 2010 - September 2020) 1 2 3 4 5 6 Number of Greenfield Projects

Number of projects does not directly translate to value of projects or jobs added. Greenfield FDI is investment in new assets.

Virginia Goods Exports to Europe, 2019 Virginia Goods Imports from Europe, 2019 Trade $5.3 bn $9.1 bn Top exports include minerals & ores, chemicals, and Machinery is the largest import from Europe, transportation equipment. followed by transportation equipment, chemicals, and computers.

Top European Export Markets, 2019 Top European Import Markets, 2019

Country Exports ($ millions) Country Imports ($ millions) United Kingdom 929 Germany 2,493 Germany 725 United Kingdom 1,180 Belgium 614 France 1,010 Netherlands 522 Italy 840 France 292 Austria 739

Top Ten Exports to Europe, 2019 ($ millions) Top Ten Imports from Europe, 2019 ($ millions)

Mining 1,158 Machinery Manufactures 1,963

Chemical Manufactures 748 Transportation Equipment 1,951

Transportation Equipment 698 Chemical Manufactures 1,069

Computers & Electronic Prod. 572 Computers & Electronic Prod. 757

Machinery Manufactures 324 Fabricated Metal Products 531 Beverage & Tobacco Agricultural Products 287 Products 521 Elec. Equip., Appliances & Misc. Manufactures 247 Parts 290

Paper Products 237 Primary Metal Manufactures 279 Elec. Equip., Appliances & Processed Foods Parts 148 251

Fabricated Metal Products 146 Misc. Manufactures 244

0 1 10 100 1,000 10,000 0 1 10 100 1,000 10,000

Sources: Bureau of Economic Analysis; U.S. Census Bureau; U.S. Department of Commerce; SelectUSA.

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Washington and Europe

83,400 Employment within Washington, 2018 Jobs Since 2006: +27,000 (+47.9%) Country Employment Canada 23,600 United Kingdom 23,000 2006 2018 Germany 19,400 Japan 14,800 European companies France 12,200 account for On a country basis, U.K. companies operating in Washington 59% represented 16% of total foreign affiliate employment of foreign affiliate jobs in Washington, with U.K. multinationals supporting approximately 9,100 more jobs in 2018 than in 2010.

Jobs directly supported by European investment. Total European-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

Sources of Greenfield Foreign Direct Investment (FDI)

Investment U.K. 12% of the total Canada 10% Japan 10% 251 China 8% Greenfield Projects (October 2010 - India 7% September 2020) 0 10 1 20 2 30 3 40 Number of Greenfield Projects

Number of projects does not directly translate to value of projects or jobs added. Greenfield FDI is investment in new assets.

Washington Goods Exports to Europe, 2019 Washington Goods Imports from Europe, 2019 Trade $11.1 bn $5.4 bn Transportation equipment dominates Washington's Imports from Europe are less concentrated than exports to Europe, making up almost 65% of total exports. The state's top import, machinery, makes up exports. only 17% of total goods imports from Europe.

Top European Export Markets, 2019 Top European Import Markets, 2019

Country Exports ($ millions) Country Imports ($ millions) United Kingdom 1,859 Russia 1,154 Germany 1,762 Germany 1,013 Turkey 1,419 France 554 Netherlands 1,299 Italy 504 Russia 861 United Kingdom 454

Top Ten Exports to Europe, 2019 ($ millions) Top Ten Imports from Europe, 2019 ($ millions)

Transportation Equipment 7,142 Machinery Manufactures 936

Computers & Electronic Prod. 1,093 Chemical Manufactures 658

Machinery Manufactures 497 Fish & Marine Products 525 Elec. Equip., Appliances & Transportation Equipment Parts 431 482

Fish & Marine Products 298 Computers & Electronic Prod. 382

Chemical Manufactures 269 Petroleum & Coal Products 332 Beverage & Tobacco Agricultural Products 232 Products 305 Elec. Equip., Appliances & Primary Metal Manufactures 202 Parts 192

Fabricated Metal Products 189 Fabricated Metal Products 168

Processed Foods 174 Furniture & Related Products 153

0 10 1,000 10,000 0 1 10 100 1,000 10,000 100,000

Sources: Bureau of Economic Analysis; U.S. Census Bureau; U.S. Department of Commerce; SelectUSA.

132 - THE TRANSATLANTIC ECONOMY 2021 Appendix A - European Commerce and the 50 U.S. States: A State-by-State Comparison

West Virginia and Europe

13,400 Employment within West Virginia, 2018 Jobs Since 2006: +1,100 (+8.9%) Country Employment Canada 6,000 Japan 4,200 2006 2018 United Kingdom 3,100 Netherlands 2,700 European companies Switzerland 1,700 account for On a country basis, U.K. companies operating in West Virginia 47% represented 11% of total foreign affiliate employment in West of foreign affiliate jobs Virginia, with U.K. multinationals supporting approximately 1,300 fewer jobs in 2018 than in 2010.

Jobs directly supported by European investment. Total European-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

Sources of Greenfield Foreign Direct Investment (FDI)

Investment Japan 24% of the total Italy 14% Canada 10% 50 China 8% Greenfield Projects (October 2010 - U.K. 6% September 2020) 0 2 4 6 8 10 12 14 Number of Greenfield Projects

Number of projects does not directly translate to value of projects or jobs added. Greenfield FDI is investment in new assets.

West Virginia Goods Exports to Europe, 2019 West Virginia Goods Imports from Europe, 2019 Trade $1.9 bn $0.7 bn Mining products such as minerals and ores Chemicals and machinery are West Virginia's top accounted for 57% of exports to Europe in 2019. imports from Europe.

Top European Export Markets, 2019 Top European Import Markets, 2019

Country Exports ($ millions) Country Imports ($ millions) Ukraine 481 Germany 227 Netherlands 447 France 102 Belgium 256 Italy 97 Germany 190 United Kingdom 58 Italy 140 Poland 41

Top Ten Exports to Europe, 2019 ($ millions) Top Ten Imports from Europe, 2019 ($ millions)

Mining 1,103 Chemical Manufactures 171

Chemical Manufactures 466 Machinery Manufactures 167

Transportation Equipment 99 Primary Metal Manufactures 118

Primary Metal Manufactures 58 Transportation Equipment 117

Machinery Manufactures 31 Fabricated Metal Products 48

Non-Metallic Mineral Mfgs. 26 Computers & Electronic Prod. 26 Elec. Equip., Appliances & Misc. Manufactures 24 Parts 12

Computers & Electronic Prod. 16 Fabric Mill Products 10

Waste & Scrap 10 Non-Metallic Mineral Mfgs. 7

Wood Products 9 Waste & Scrap 6

0 1 10 100 1,000 10,000 0 1 10 100 1,000 10,000

Sources: Bureau of Economic Analysis; U.S. Census Bureau; U.S. Department of Commerce; SelectUSA.

133 - THE TRANSATLANTIC ECONOMY 2021 Appendix A - European Commerce and the 50 U.S. States: A State-by-State Comparison

Wisconsin and Europe

81,500 Employment within Wisconsin, 2018 Jobs Since 2006: +17,400 (+27.1%) Country Employment United Kingdom 16,700 Canada 16,500 2006 2018 Germany 14,700 France 10,100 European companies Switzerland 10,000 account for On a country basis, U.K. companies operating in Wisconsin 68% represented 14% of total foreign affiliate employment in of foreign affiliate jobs Wisconsin, with U.K. multinationals supporting approximately 5,400 more jobs in 2018 than in 2010.

Jobs directly supported by European investment. Total European-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

Sources of Greenfield Foreign Direct Investment (FDI)

Investment Germany 14% of the total Canada 12% Switzerland 10% 138 U.K. 9% Greenfield Projects (October 2010 - Ireland 6% September 2020) 0 2 4 6 8 10 12 14 16 18 20 22 Number of Greenfield Projects

Number of projects does not directly translate to value of projects or jobs added. Greenfield FDI is investment in new assets.

Wisconsin Goods Exports to Europe, 2019 Wisconsin Goods Imports from Europe, 2019 Trade $4.4 bn $8.9 bn Machinery and computers & electronic products are Chemicals and machinery accounted for 38% and the state's top exports to Europe. 27% of total imports from Europe, respectively.

Top European Export Markets, 2019 Top European Import Markets, 2019

Country Exports ($ millions) Country Imports ($ millions) United Kingdom 805 Ireland 2,333 Germany 760 Germany 1,932 Netherlands 452 Italy 925 France 435 United Kingdom 778 Belgium 419 France 478

Top Ten Exports to Europe, 2019 ($ millions) Top Ten Imports from Europe, 2019 ($ millions)

Machinery Manufactures 1,243 Chemical Manufactures 3,403

Computers & Electronic Prod. 631 Machinery Manufactures 2,446

Chemical Manufactures 577 Computers & Electronic Prod. 742 Elec. Equip., Appliances & Transportation Equipment 481 Parts 434 Elec. Equip., Appliances & Misc. Manufactures Parts 302 296

Misc. Manufactures 228 Fabricated Metal Products 289

Agricultural Products 167 Primary Metal Manufactures 260

Fabricated Metal Products 162 Processed Foods 205

Processed Foods 158 Plastic & Rubber Products 154

Plastic & Rubber Products 149 Transportation Equipment 144

0 1 10 100 1,000 10,000 0 1 10 100 1,000 10,000

Sources: Bureau of Economic Analysis; U.S. Census Bureau; U.S. Department of Commerce; SelectUSA.

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Wyoming and Europe

5,200 Employment within Wyoming, 2018 Jobs Since 2006: +300 (+6.1%) Country Employment United Kingdom 2,000 France 1,100 2006 2018 Canada 800 Switzerland 300 European companies Germany 200 account for On a country basis, U.K. companies operating in Wyoming 63% represented 24% of total foreign affiliate employment in of foreign affiliate jobs Wyoming, with U.K. multinationals supporting approximately 300 more jobs in 2018 than in 2010.

Jobs directly supported by European investment. Total European-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

Sources of Greenfield Foreign Direct Investment (FDI)

Investment Belgium 30% of the total Canada 20% 10 Turkey 10% Spain 10% Greenfield Projects (October 2010 - Hong Kong 10% September 2020) 0 1 2 4 5 Number of Greenfield Projects

Number of projects does not directly translate to value of projects or jobs added. Greenfield FDI is investment in new assets.

Wyoming Goods Exports to Europe, 2019 Wyoming Goods Imports from Europe, 2019 Trade $52.1 m $97.8 m Chemicals accounted for 22% of Wyoming's Machinery and fabricated metal products are exports to Europe in 2019, down from a share of Wyoming's top imports from Europe. approximately 50% the prior year.

Top European Export Markets, 2019 Top European Import Markets, 2019

Country Exports ($ millions) Country Imports ($ millions) Austria 9 Germany 21 Belgium 8 Italy 16 Netherlands 7 Turkey 15 Ireland 5 United Kingdom 10 Switzerland 4 Belgium 5

Top Ten Exports to Europe, 2019 ($ millions) Top Ten Imports from Europe, 2019 ($ millions)

Chemical Manufactures 12 Machinery Manufactures 25

Used Merchandise 10 Fabricated Metal Products 14

Computers & Electronic Prod. 6 Used Merchandise 13 Elec. Equip., Appliances & Computers & Electronic Prod. Parts 6 10

Wood Products 5 Leather & Related Goods 6

Machinery Manufactures 5 Processed Foods 5

Fabricated Metal Products 4 Plastic & Rubber Products 4

Transportation Equipment 2 Transportation Equipment 4

Mining 1.2 Chemical Manufactures 4 Elec. Equip., Appliances & Misc. Manufactures 0.6 Parts 3 0 1 10 100 1,000 10,000 0 1 10 100 1,000 10,000

Sources: Bureau of Economic Analysis; U.S. Census Bureau; U.S. Department of Commerce; SelectUSA.

135 - THE TRANSATLANTIC ECONOMY 2021 Appendix B U.S. Commerce and Europe: A Country-by-Country Comparison Appendix B - U.S. Commerce and Europe: A Country-by-Country Comparison

Appendix B U.S. Commerce and Europe: A Country-by-Country Comparison

137 - THE TRANSATLANTIC ECONOMY 2021 Appendix B - U.S. Commerce and Europe: A Country-by-Country Comparison

Europe & the United States

United States in Europe Europe in the United States

4,869,657 Jobs 5,036,599

Jobs directly supported by majority-owned affiliates. Estimates for 2019. Total U.S.-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

$3.6 tn Investment $2.9 tn Foreign Direct Investment (FDI), 2019 Foreign Direct Investment (FDI), 2019 In terms of the U.S.-Europe investment balance, the U.S. had a larger net cross-border impact in 2019. U.S. foreign direct investment in Europe increased slightly in 2019 to $3.6 trillion. The pace of FDI growth in recent years has slowed due to U.S. corporations' repatriation of foreign earnings after the 2017 U.S. Tax Cuts and Jobs Act. Meanwhile, Europe's foreign direct investment in the U.S. rose to $2.9 trillion. According to estimates for 2019, U.S. affiliates employed over 4.8 million workers in Europe while European affiliates employed about 5.0 million Americans. Trillion $ U.S. FDI Position in Europe Europe FDI Position in the U.S. Trillion $ 4.0 4.0 3.5 3.5 3.0 3.0 2.5 2.5 2.0 2.0 1.5 1.5 1.0 1.0 0.5 0.5 0 0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

Foreign direct investment position, historic-cost basis, 2000-2019.

$381.7 bn Trade in $604.3 bn Goods U.S. Goods Exports to Europe, 2019 U.S. Goods Imports from Europe, 2019 5.4% The U.S. supplied 17.9% …but the U.S. share 7.7% The U.S. received 7.7% 25.9% …but the U.S. share 5.4% of the increases to 17.9% of the total goods increases to 25.9% Europe's total when intra-Europe Europe exported to when intra-Europe imports… trade is excluded from the world… trade is excluded from the total. the total.

Top Five U.S. Goods Exports to Europe ($ billions) Top Five U.S. Goods Imports from Europe ($ billions)

Transportation 76.7 Chemical 156.6 Equipment 34.4 Manufactures 41.7 Chemical 67.6 Transportation 96.5 Manufactures 24.7 Equipment 46.7 Computers & 38.2 Machinery 64.4 Electronic Prod. 45.8 Manufactures 30.6 Misc. 27.6 Computers & 39.1 Manufactures 8.8 Electronic Prod. 26.0 Oil & Gas 27.0 Misc. 26.7 Extraction 0.0 Manufactures 10.7 0 1 10 100 1,000 0 1 10 100 1,000

n 2019 n 2000 n 2019 n 2000

Top State Exporters of Goods to Europe ($ billions) Top State Importers of Goods from Europe ($ billions)

1 2 3 4 5 1 2 3 4 5 52.5 38.9 26.1 12.5 12.4 55.3 45.4 45.3 42.9 36.9 Texas California New York South Pennsyl­ New Jersey New York California Texas Pennsyl­ Carolina vania vania

Trade in $345.2 bn Services $245.4 bn U.S. Services Exports to Europe, 2019 U.S. Services Imports from Europe, 2019

"Europe” refers to all 28 members of the European Union in 2019 plus Albania, Andorra, Armenia, Azerbaijan, Belarus, Bosnia and Herzegovina, Georgia, Gibraltar, Greenland, Iceland, Kazakhstan, Kosovo, Kyrgyzstan, North Macedonia, Malta, Moldova, Monaco, Montenegro, Norway, Russia, Serbia, San Marino, Switzerland, Turkey, Tajikistan, Turkmenistan, Ukraine, Uzbekistan, Vatican. Sources: Bureau of Economic Analysis; U.S. Commerce Department; International Monetary Fund; Office of Trade and Economic Analysis.

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The EU28 and the United States

United States in the EU The EU in the United States

4,417,275 Jobs 4,523,100

Jobs directly supported by majority-owned affiliates. Estimates for 2019. Total U.S.-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

$3.3 tn Investment $2.5 tn Foreign Direct Investment (FDI), 2019 Foreign Direct Investment (FDI), 2019 In terms of the U.S.-EU investment balance, the U.S. had a larger net cross-border impact in 2019. U.S. foreign direct investment in the EU totaled a record $3.3 trillion in 2019, and the EU's foreign direct investment in the U.S. rose to $2.5 trillion. According to estimates for 2019, U.S. affiliates employed over 4.4 million workers in the EU while EU affiliates employed roughly 4.5 million Americans. U.S. FDI Position in the EU The EU FDI Position in the U.S. Trillion $ Trillion $ 4.0 4.0 3.5 3.5 3.0 3.0 2.5 2.5 2.0 2.0 1.5 1.5 1.0 1.0 0.5 0.5 0 0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

Foreign direct investment position, historic-cost basis, 2000-2019. *The EU FDI trend charts show an increasing number of member countries overtime. The U.K. is included in all years 2000-2019. Prior to 2013 the EU excludes Croatia. Prior to 2007, it also excludes Bulgaria and Romania. Prior to 2004, it also excludes Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia.

$336.7 bn Trade in $515.2 bn Goods U.S. Goods Exports to the EU, 2019 U.S. Goods Imports from the EU, 2019 5.3% The U.S. supplied 14.3% …but the U.S. share 8.0% The U.S. received 21.9% …but the U.S. share 5.3% of the EU's increases to 14.3% 8.0% of the total increases to 21.9% total imports… when intra-EU trade goods the EU when intra-EU trade is excluded from the exported to the is excluded from the total. world… total.

Top Five U.S. Goods Exports to the EU ($ billions) Top Five U.S. Goods Imports from the EU ($ billions)

Transportation 68.2 Chemical 132.9 Equipment 31.2 Manufactures 37.7 Chemical 62.2 Transportation 93.1 Manufactures 22.8 Equipment 46.0 Computers & 34.8 Machinery 60.2 Electronic Prod. 43.7 Manufactures 28.3 Oil & Gas 25.8 Computers & 33.2 Extraction 0.004 Electronic Prod. 23.7 Machinery 22.7 Misc. 22.8 Manufactures 20.0 Manufactures 9.5 0 1 10 100 1,000 0 1 10 100 1,000

n 2019 n 2000 n 2019 n 2000

Top State Exporters of Goods to the EU ($ billions) Top State Importers of Goods from the EU ($ billions)

1 2 3 4 5 1 2 3 4 5 47.5 35.1 18.3 11.8 11.6 43.1 32.9 30.7 30.1 27.7 Texas California New York South Kentucky New Jersey California New York Texas Illinois Carolina

$279.0 bn Trade in $208.3 bn Services U.S. Services Exports to the EU, 2019 U.S. Services Imports from the EU, 2019

"EU” refers to all 28 members of the European Union as of 2019. Prior to 2013 it excludes Croatia. Prior to 2007, it also excludes Bulgaria and Romania. Prior to 2004, it also excludes Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia. Sources: Bureau of Economic Analysis; U.S. Commerce Department; International Monetary Fund; Office of Trade and Economic Analysis.

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The EU (ex. UK) & the United States

United States in the EU (ex. UK) The EU (ex. UK) in the United States

2,929,818 Jobs 3,220,287

Jobs directly supported by majority-owned affiliates. Estimates for 2019. Total U.S.-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

$2.4 tn Investment $2.0 tn Foreign Direct Investment (FDI), 2019 Foreign Direct Investment (FDI), 2019 When the UK is excluded from the EU data, U.S. outward investment is about 25% lower than the EU28 figure. U.S. outward FDI to the EU excluding the U.K. in 2019 was $2.4 trillion, supporting roughly 2.9 million jobs. Inward FDI from the 27 EU member states to the U.S. was a bit lower, $2.0 trillion, but supported more jobs (3.2 million). U.S. FDI Position in the EU (ex. UK) EU (ex. UK) FDI Position in the U.S. Trillion $ Trillion $ 4.0 4.0 3.5 3.5 3.0 3.0 2.5 2.5 2.0 2.0 1.5 1.5 1.0 1.0 0.5 0.5 0 0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

Foreign direct investment position, historic-cost basis, 2000-2019. *The EU (ex. UK) FDI trend excludes the UK from EU data from 2000-2019. Prior to 2013 it also excludes Croatia. Prior to 2007, it also excludes Bulgaria and Romania. Prior to 2004, it also excludes Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia.

$267.6 bn Trade in $452.0 bn Goods U.S. Goods Exports to the EU (ex. UK), 2019 U.S. Goods Imports from the EU (ex. UK), 2019 4.7% The U.S. supplied 12.0% …but the U.S. share 7.4% The U.S. received 18.0% …but the U.S. share 4.7% of the EU's (ex. increases to 12.0% 7.4% of the total increases to 18.0% UK) total imports… when intra-EU (ex. UK) goods the EU (ex. when intra-EU (ex. trade is excluded from UK) exported to the UK) trade is excluded the total. world… from the total.

Top Five U.S. Goods Exports to the EU (ex. UK) ($ billions) Top Five U.S. Goods Imports from the EU (ex. UK) ($ billions)

Chemical 55.7 Chemical 123.3 Manufactures 18.6 Manufactures 31.3 Transportation 55.1 Transportation 76.1 Equipment 23.1 Equipment 38.1 Computers & 29.6 Machinery 53.5 Electronic Prod. 32.8 Manufactures 23.4 Oil & Gas 19.8 Computers & 29.1 Extraction 0.002 Electronic Prod. 18.0 Misc. 19.0 Misc. 20.9 Manufactures 6.1 Manufactures 8.5 0 1 10 100 1,000 0 1 10 100 1,000

n 2019 n 2000 n 2019 n 2000

Top State Exporters of Goods to the EU (ex. UK) ($ billions) Top State Importers of Goods from the EU (ex. UK) ($ billions)

1 2 3 4 5 1 2 3 4 5 37.9 29.8 13.0 9.7 9.0 38.1 32.9 30.7 30.1 27.7 Texas California New York South Louisiana New Jersey California New York Texas Illinois Carolina

Trade in $200.7 bn Services $146.0 bn U.S. Services Exports to the EU (ex. UK), 2019 U.S. Services Imports from the EU (ex. UK), 2019

"The EU (ex. UK)” refers to the 27 members of the European Union as of January 31, 2020 (without the United Kingdom). Sources: Bureau of Economic Analysis; U.S. Commerce Department; International Monetary Fund; Office of Trade and Economic Analysis.

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Austria and the United States

United States in Austria Austria in the United States

47,635 Jobs 29,109

Jobs directly supported by majority-owned affiliates. Estimates for 2019. Total U.S.-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

$7.6 bn Investment $14.0 bn Foreign Direct Investment (FDI), 2019 Foreign Direct Investment (FDI), 2019

America’s direct investment position in Austria has remained steady near $8 billion since a sharp decline in FDI from 2013-2015. Austria's investment stake in the U.S. now exceeds America's investment in Austria. However, American affiliates employed 1.6 times as many workers in Austria than Austrian firms employed in the U.S., according to 2019 estimates.

U.S. FDI Position in Austria Austria FDI Position in the U.S. Billion $ Billion $ 20 20 16 16 12 12 8 8 4 4 0 0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

Foreign direct investment position, historic-cost basis, 2000-2019.

$5.7 bn Trade in $13.2 bn Goods U.S. Goods Exports to Austria, 2019 U.S. Goods Imports from Austria, 2019 2.9% The U.S. supplied 13.4% …but the U.S. share 6.2% The U.S. received 21.1% …but the U.S. share 2.9% of Austria's increases to 13.4% 6.2% of the total increases to 21.1% total imports… when intra-EU trade goods Austria when intra-EU trade is excluded from the exported to the is excluded from the total. world… total.

Top Five U.S. Goods Exports to Austria ($ millions) Top Five U.S. Goods Imports from Austria ($ millions)

Chemical 2,952.5 Transportation 2,831.8 Manufactures 172.1 Equipment 351.4 Transportation 560.0 Machinery 2,373.9 Equipment 1,322.3 Manufactures 574.4 Computers & 379.6 Chemical 2,132.5 Electronic Prod. 423.4 Manufactures 369.0 Mining 359.5 Beverage & 1,064.2 1.9 Tobacco Products 51.6 Machinery 305.8 Fabricated 775.6 Manufactures 204.2 Metal Products 253.2 0 10 1,000 100,000 0 10 1,000 100,000

n 2019 n 2000 n 2019 n 2000

Top State Exporters of Goods to Austria ($ millions) Top State Importers of Goods from Austria ($ millions)

1 2 3 4 5 1 2 3 4 5 845.8 380.8 309.5 262.8 214.5 1,641.4 1,110.4 960.5 949.9 914.2 Kentucky Alabama California North Florida California Georgia Texas South New Jersey Carolina Carolina

Trade in $1.8 bn Services $1.5 bn U.S. Services Exports to Austria, 2019 U.S. Services Imports from Austria, 2019

Note: U.K. included in EU for purposes of calculating intra-EU trade. Sources: Bureau of Economic Analysis; U.S. Commerce Department; International Monetary Fund; Office of Trade and Economic Analysis.

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Belgium and the United States

United States in Belgium Belgium in the United States

126,858 Jobs 67,852

Jobs directly supported by majority-owned affiliates. Estimates for 2019. Total U.S.-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

$63.2 bn Investment $65.9 bn Foreign Direct Investment (FDI), 2019 Foreign Direct Investment (FDI), 2019 U.S. direct investments in Belgium are heavily concentrated in the manufacturing sector, which makes up 63% of U.S. FDI in Belgium. Meanwhile, the manufacturing sector accounts for 80% of Belgium's FDI stock in the U.S. Foreign affiliate employment by U.S. companies in Belgium was almost double Belgian companies' employment in the U.S. Affiliate employment by Belgian multinationals in the U.S. fell sharply in 2016, from 148,000 employees to just 51,000, but since then employment is estimated to have picked up slightly to almost 68,000 workers in 2019. Value added by U.S. affiliates in Belgium was an estimated $27.8 billion in 2019, about double that of Belgian affiliates in the U.S. U.S. FDI Position in Belgium Belgium FDI Position in the U.S. Billion $ Billion $ 120 120 100 100 80 80 60 60 40 40 20 20 0 0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

FDI position based on a historic-cost basis, 2000-2016.

$34.7 bn Trade in $20.2 bn Goods U.S. Goods Exports to Belgium, 2019 U.S. Goods Imports from Belgium, 2019 7.6% The U.S. supplied 21.2% …but the U.S. share 6.2% The U.S. received 22.6% …but the U.S. share 7.6% of Belgium's increases to 21.2% 6.2% of the total increases to 22.6% total imports… when intra-EU trade goods Belgium when intra-EU trade is excluded from the exported to the is excluded from the total. world… total.

Top Five U.S. Goods Exports to Belgium ($ millions) Top Five U.S. Goods Imports from Belgium ($ millions)

Chemical 12,000.7 Chemical 8,485.1 Manufactures 4,493.9 Manufactures 1,796.5 Transportation 6,337.9 Petroleum & 2,111.5 Equipment 1,157.0 Coal Products 671.9 Misc. 5,256.2 Misc. 2,047.3 Manufactures 1,491.0 Manufactures 2,648.3 Machinery 2,575.8 Transportation 1,874.4 Manufactures 2,016.1 Equipment 1,280.1 Computers & 1,871.8 Machinery 968.2 Electronic Prod. 1,308.6 Manufactures 701.3 0 10 1,000 100,000 0 10 1,000 100,000

n 2019 n 2000 n 2019 n 2000

Top State Exporters of Goods to Belgium ($ millions) Top State Importers of Goods from Belgium ($ millions)

1 2 3 4 5 1 2 3 4 5 6,340.5 4,108.7 3,365.1 1,798.9 1,285.9 4,868.9 2,615.6 1,477.5 1,251.8 1,191.4 California Texas New York Pennsyl­ South Pennsyl­ New York New Jersey Texas California vania Carolina vania

Trade in $5.6 bn Services $4.4 bn U.S. Services Exports to Belgium, 2019 U.S. Services Imports from Belgium, 2019

Note: U.K. included in EU for purposes of calculating intra-EU trade. Sources: Bureau of Economic Analysis; U.S. Commerce Department; International Monetary Fund; Office of Trade and Economic Analysis.

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Bulgaria and the United States

United States in Bulgaria Bulgaria in the United States

9,954 Jobs 307

Jobs directly supported by majority-owned affiliates. Estimates for 2019. Total U.S.-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

$756 m Investment $30 m Foreign Direct Investment (FDI), 2019 Foreign Direct Investment (FDI), 2017*

America's investment base in Bulgaria is relatively small, and foreign affiliate sales totaled just $2.6 billion in 2019, according to estimates. U.S. affiliates in Bulgaria employed approximately 10,000 workers in 2019, placing Bulgaria 6th among the EU13 in terms of U.S. firms' employment abroad.

U.S. FDI Position in Bulgaria Bulgaria FDI Position in the U.S. Billion $ Billion $ 1.0 1.0 0.8 0.8 0.6 0.6 0.4 0.4 0.2 0.2 0 0 -0.2 -0.2 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

Foreign direct investment position, historic-cost basis, 2000-2019. Note: Dotted line indicates that data has been suppressed for a particular year to avoid disclosure of individual company data. *Latest year of available data.

$463 m Trade in $910 m Goods U.S. Goods Exports to Bulgaria, 2019 U.S. Goods Imports from Bulgaria, 2019 1.0% The U.S. supplied 2.6% …but the U.S. share 1.9% The U.S. received 1.9% 5.5% …but the U.S. share 1.0% of Bulgaria's increases to 2.6% of the total goods increases to 5.5% total imports… when intra-EU trade Bulgaria exported to when intra-EU trade is excluded from the the world… is excluded from the total. total.

Top Five U.S. Goods Exports to Bulgaria ($ millions) Top Five U.S. Goods Imports from Bulgaria ($ millions)

90.7 154.0 Mining Computers & 36.7 Electronic Prod. 4.6 Machinery 77.2 Chemical 108.8 Manufactures 8.0 Manufactures 9.4 Computers & 62.8 Machinery 104.3 Electronic Prod. 22.6 Manufactures 6.0 Transportation 34.2 Apparel & 85.6 Equipment 10.4 Accessories 95.5 Oil & Gas 30.3 Misc. 85.5 Extraction 0.0 Manufactures 0.7 0 10 1,000 100,000 0 10 1,000 100,000

n 2019 n 2000 n 2019 n 2000

Top State Exporters of Goods to Bulgaria ($ millions) Top State Importers of Goods from Bulgaria ($ millions)

1 2 3 4 5 1 2 3 4 5 82.0 54.9 42.4 41.3 25.7 101.5 72.9 59.8 50.6 49.9 Texas Washington Nevada California Florida Massa­ New York Texas California Missouri chusetts

Trade in $354 m Services $303 m U.S. Services Exports to Bulgaria, 2019 U.S. Services Imports from Bulgaria, 2019

Note: U.K. included in EU for purposes of calculating intra-EU trade. Sources: Bureau of Economic Analysis; U.S. Commerce Department; International Monetary Fund; Office of Trade and Economic Analysis.

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Croatia and the United States

United States in Croatia Croatia in the United States

2,031 Jobs < 50

Jobs directly supported by majority-owned affiliates. Estimates for 2018. Total U.S.-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

$184 m Investment $19 m Foreign Direct Investment (FDI), 2019 Foreign Direct Investment (FDI), 2018*

U.S. direct investment in Croatia has fluctuated in recent years around $200 million, while Croatia's direct investment position in the U.S. is much lower, around $19 million. U.S. foreign affiliates in Croatia employed an estimated 2,000 workers in 2019, ranking 24th among the 27 EU countries. Meanwhile, Croatian foreign direct investment in the U.S. directly supported fewer than 50 jobs.

U.S. FDI Position in Croatia Croatia FDI Position in the U.S. Billion $ Billion $ 0.3 0.3 0.2 0.2 0.1 0.1 0 0 -0.1 -0.1 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

Foreign direct investment position, historic-cost basis, 2000-2019. Note: Dotted line indicates that data has been suppressed for a particular year to avoid disclosure of individual company data. *Latest year of available data. Negative FDI positions can occur when the loans from the affiliate to the parent company exceed the equity and debt investments from the parent to the affiliate, or if a foreign affiliate incurs sufficiently large losses.

$711 m Trade in $548 m Goods U.S. Goods Exports to Croatia, 2019 U.S. Goods Imports from Croatia, 2019 0.7% The U.S. supplied 3.3% …but the U.S. share 2.7% The U.S. received 8.3% …but the U.S. share 0.7% of Croatia's increases to 3.3% 2.7% of the total increases to 8.3% total imports… when intra-EU trade goods Croatia when intra-EU trade is excluded from the exported to the is excluded from the total. world… total.

Top Five U.S. Goods Exports to Croatia ($ millions) Top Five U.S. Goods Imports from Croatia ($ millions)

276.4 Chemical 257.4 Mining 2.1 Manufactures 67.2 Computers & 171.6 Machinery 59.4 Electronic Prod. 17.0 Manufactures 9.1 Oil & Gas 89.4 Fabricated 52.3 Extraction 0.0 Metal Products 5.7 Chemical 41.2 Elec. Equip., 39.0 Manufactures 14.7 Appliances & Parts 3.0 Machinery 28.7 Primary Metal 26.1 Manufactures 26.5 Manufactures 6.0 0 10 1,000 100,000 0 10 1,000 100,000

n 2019 n 2000 n 2019 n 2000

Top State Exporters of Goods to Croatia ($ millions) Top State Importers of Goods from Croatia ($ millions)

1 2 3 4 5 1 2 3 4 5 213.0 165.7 98.0 41.9 26.0 207.6 48.7 26.1 22.5 20.0 Virginia Pennsyl­ Texas Alabama California Pennsyl­ Illinois New York Maryland North vania vania Carolina

Trade in $264 m Services $369 m U.S. Services Exports to Croatia, 2019 U.S. Services Imports from Croatia, 2019

Note: U.K. included in EU for purposes of calculating intra-EU trade. Sources: Bureau of Economic Analysis; U.S. Commerce Department; International Monetary Fund; Office of Trade and Economic Analysis; United Nations.

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Cyprus and the United States

United States in Cyprus Cyprus in the United States

1,524 Jobs 3,587

Jobs directly supported by majority-owned affiliates. Estimates for 2019. Total U.S.-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

$4.9 bn Investment $0.1 bn Foreign Direct Investment (FDI), 2019 Foreign Direct Investment (FDI), 2019

Given the country's small market, Cyprus has not attracted much U.S. foreign direct investment relative to other EU members. U.S. investment in Cyprus declined slightly in 2019 to $4.9 billion. Cyprus's FDI in the U.S., meanwhile, has continued to decline and is now at the lowest level in 20 years. That said, Cyprus-based companies continued to support roughly 2,000 more jobs in the U.S. than American corporations supported in Cyprus. U.S. FDI Position in Cyprus Cyprus FDI Position in the U.S. Billion $ Billion $ 6 6 5 5 4 4 3 3 2 2 1 1 0 0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

Foreign direct investment position, historic-cost basis, 2000-2019. Note: Dotted line indicates that data has been suppressed for a particular year to avoid disclosure of individual company data.

$204 m Trade in $73 m Goods U.S. Goods Exports to Cyprus, 2019 U.S. Goods Imports from Cyprus, 2019 1.6% The U.S. supplied 4.9% …but the U.S. share 2.2% The U.S. received 3.8% …but the U.S. share 1.6% of Cyprus's increases to 4.9% 2.2% of the total increases to 3.8% total imports… when intra-EU trade goods Cyprus when intra-EU trade is excluded from the exported to the is excluded from the total. world… total.

Top Five U.S. Goods Exports to Cyprus ($ millions) Top Five U.S. Goods Imports from Cyprus ($ millions)

Transportation 61.5 Computers & 17.4 Equipment 5.9 Electronic Prod. 3.5 Elec. Equip., 27.8 9.8 Appliances & Parts 2.6 Mining 1.5 Fabricated 26.4 Food & 6.6 Metal Products 1.1 Kindred Products 1.6 Machinery 19.0 Misc. 3.1 Manufactures 15.0 Manufactures 0.2 Computers & 17.5 Chemical 2.1 Electronic Prod. 19.9 Manufactures 1.0 0 10 1,000 100,000 0 10 1,000 100,000

n 2019 n 2000 n 2019 n 2000

Top State Exporters of Goods to Cyprus ($ millions) Top State Importers of Goods from Cyprus ($ millions)

1 2 3 4 5 1 2 3 4 5 58.6 58.2 20.9 15.8 5.5 19.0 15.9 9.6 5.3 3.6 Texas Georgia Alabama California New Jersey Texas Idaho New York Alabama New Jersey

Trade in $681 m Services $679 m U.S. Services Exports to Cyprus, 2019 U.S. Services Imports from Cyprus, 2019

Note: U.K. included in EU for purposes of calculating intra-EU trade. Sources: Bureau of Economic Analysis; U.S. Commerce Department; International Monetary Fund; Office of Trade and Economic Analysis.

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Czech Republic and the United States

United States in Czech Republic Czech Republic in the United States

79,832 Jobs 102

Jobs directly supported by majority-owned affiliates. Estimates for 2019. Total U.S.-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

$4.8 bn Investment $0.1 bn Foreign Direct Investment (FDI), 2019 Foreign Direct Investment (FDI), 2015*

America's investment base in the Czech Republic has declined in recent years from a peak of $6.4 billion in 2013 to $4.8 billion in 2019. Czech Republic FDI in the U.S. amounted to just $113 million, as of the latest data in 2015. Affiliate employment by U.S. multinationals in the Czech Republic is much larger than that of Czech firms in the U.S. Total sales of U.S. foreign affiliates in the Czech Republic were an estimated $17.3 billion in 2019, while sales by Czech firms in the U.S. were just $52 million.

U.S. FDI Position in Czech Republic Czech Republic FDI Position in the U.S. Billion $ Billion $ 7 7 6 6 5 5 4 4 3 3 2 2 1 1 0 0 -1 -1 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

Foreign direct investment position, historic-cost basis, 2000-2019. *Latest year of available data.

$2.8 bn Trade in $5.5 bn Goods U.S. Goods Exports to Czech Republic, 2019 U.S. Goods Imports from Czech Republic, 2019 2.0% The U.S. supplied 8.0% …but the U.S. share 2.3% The U.S. received 14.3% …but the U.S. share 2.0% of Czech increases to 8.0% 2.3% of the total increases to 14.3% Republic's total when intra-EU trade goods Czech when intra-EU trade imports… is excluded from the Republic exported to is excluded from the total. the world… total.

Top Five U.S. Goods Exports to Czech Republic ($ millions) Top Five U.S. Goods Imports from Czech Republic ($ millions)

Computers & 934.3 Computers & 1,093.7 Electronic Prod. 201.5 Electronic Prod. 282.1 Machinery 552.3 Machinery 768.1 Manufactures 74.9 Manufactures 138.1 Transportation 331.0 Transportation 751.6 Equipment 201.4 Equipment 74.5 Elec. Equip., 159.8 Elec. Equip., 507.3 Appliances & Parts 38.6 Appliances & Parts 72.5 Chemical 154.3 Chemical 491.2 Manufactures 37.2 Manufactures 66.5 0 10 1,000 100,000 0 10 1,000 100,000

n 2019 n 2000 n 2019 n 2000

Top State Exporters of Goods to Czech Republic ($ millions) Top State Importers of Goods from Czech Republic ($ millions)

1 2 3 4 5 1 2 3 4 5 496.0 462.0 144.4 131.6 90.5 684.1 501.0 432.0 343.5 336.7 Texas California Wisconsin New York Illinois Texas South Pennsyl­ California Ohio Carolina vania

Trade in $1.4 bn Services $1.6 bn U.S. Services Exports to Czech Republic, 2019 U.S. Services Imports from Czech Republic, 2019

Note: U.K. included in EU for purposes of calculating intra-EU trade. Sources: Bureau of Economic Analysis; U.S. Commerce Department; International Monetary Fund; Office of Trade and Economic Analysis.

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Denmark and the United States

United States in Denmark Denmark in the United States

45,299 Jobs 42,023

Jobs directly supported by majority-owned affiliates. Estimates for 2019. Total U.S.-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

$9.0 bn Investment $23.9 bn Foreign Direct Investment (FDI), 2019 Foreign Direct Investment (FDI), 2019 Bilateral investment between the U.S. and Denmark was relatively equal in 2016, with Denmark investing only $1 billion more in the U.S. than what the U.S. invested in Denmark. Thereafter, the investment gap widened as U.S. investment in Denmark declined while Denmark's investment in the U.S. expanded. In 2019, Danish firms' affiliate sales in the U.S. market were an estimated $30 billion while U.S. foreign affiliate sales in Denmark were $23 billion. The affiliate employment balance favors Denmark slightly, with U.S. affiliates in Denmark employing roughly 3,000 more people than Danish affiliates employ in the U.S., according to 2019 estimates. U.S. FDI Position in Denmark Denmark FDI Position in the U.S. Billion $ Billion $ 25 25 20 20 15 15 10 10 5 5 0 0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

Foreign direct investment position, historic-cost basis, 2000-2019.

$3.2 bn Trade in $11.0 bn Goods U.S. Goods Exports to Denmark, 2019 U.S. Goods Imports from Denmark, 2019 3.5% The U.S. supplied 11.7% …but the U.S. share 10.2% The U.S. received 24.6% …but the U.S. share 3.5% of Denmark's increases to 11.7% 10.2% of the total increases to 24.6% total imports… when intra-EU trade goods Denmark when intra-EU trade is excluded from the exported to the is excluded from the total. world… total.

Top Five U.S. Goods Exports to Denmark ($ millions) Top Five U.S. Goods Imports from Denmark ($ millions)

Oil & Gas 749.3 Chemical 6,921.0 Extraction 0.03 Manufactures 505.8 Chemical 519.5 Machinery 1,067.2 Manufactures 118.2 Manufactures 462.8 Computers & 354.6 Computers & 631.3 Electronic Prod. 391.9 Electronic Prod. 389.5 Machinery 253.9 Food & 454.8 Manufactures 213.7 Kindred Products 392.3 Transportation 156.7 Misc. 360.8 Equipment 224.3 Manufactures 172.9 0 10 1,000 100,000 0 10 1,000 100,000

n 2019 n 2000 n 2019 n 2000

Top State Exporters of Goods to Denmark ($ millions) Top State Importers of Goods from Denmark ($ millions)

1 2 3 4 5 1 2 3 4 5 910.6 365.4 324.6 133.0 109.7 5,933.7 549.6 413.1 409.5 389.6 Texas California North Florida Georgia Indiana North Texas California Illinois Carolina Carolina

Trade in $8.2 bn Services $5.7 bn U.S. Services Exports to Denmark, 2019 U.S. Services Imports from Denmark, 2019

Note: U.K. included in EU for purposes of calculating intra-EU trade. Sources: Bureau of Economic Analysis; U.S. Commerce Department; International Monetary Fund; Office of Trade and Economic Analysis.

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Estonia and the United States

United States in Estonia Estonia in the United States

3,453 Jobs < 50

Jobs directly supported by majority-owned affiliates. Estimates for 2019. Total U.S.-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

$68 m Investment -$4 m Foreign Direct Investment (FDI), 2019 Foreign Direct Investment (FDI), 2019*

America's direct investment base in Estonia is one of the smallest of the European Union. U.S. affiliates employed roughly 3,500 people in 2019, placing Estonia 23rd among the EU27 countries in terms of employment. Business conditions are favorable for foreign companies in Estonia, with the country ranking 18th out of 190 economies listed in the World Bank's Ease of Doing Business Index. Estonia's advanced digital economy also offers some attraction for U.S. companies.

U.S. FDI Position in Estonia Estonia FDI Position in the U.S. Billion $ Billion $ 0.20 0.20 0.15 0.15 0.10 0.10 0.05 0.05 0.00 0.00 -0.05 -0.05 -0.10 -0.10 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

Foreign direct investment position, historic-cost basis, 2000-2019. Note: Dotted line indicates that data has been suppressed for a particular year to avoid disclosure of individual company data. *Negative FDI positions can occur when the loans from the affiliate to the parent company exceed the equity and debt investments from the parent to the affiliate, or if a foreign affiliate incurs sufficiently large losses.

$0.4 bn Trade in $1.0 bn Goods U.S. Goods Exports to Estonia, 2019 U.S. Goods Imports from Estonia, 2019 1.1% The U.S. supplied 4.9% …but the U.S. share 6.8% The U.S. received 22.7% …but the U.S. share 1.1% of Estonia's increases to 4.9% 6.8% of the total increases to 22.7% total imports… when intra-EU trade goods Estonia when intra-EU trade is excluded from the exported to the is excluded from the total. world… total.

Top Five U.S. Goods Exports to Estonia ($ millions) Top Five U.S. Goods Imports from Estonia ($ millions)

Computers & 81.3 Computers & 580.1 Electronic Prod. 15.6 Electronic Prod. 2.5 Machinery 75.8 Elec. Equip., 101.6 Manufactures 4.3 Appliances & Parts 0.2 Transportation 63.6 Machinery 63.8 Equipment 1.5 Manufactures 1.4 Misc. 53.1 Wood 47.1 Manufactures 1.5 Products 4.7 Crop Production 48.9 Chemical 41.0 6.3 Manufactures 7.7 0 10 1,000 100,000 0 10 1,000 100,000

n 2019 n 2000 n 2019 n 2000

Top State Exporters of Goods to Estonia ($ millions) Top State Importers of Goods from Estonia ($ millions)

1 2 3 4 5 1 2 3 4 5 74.6 46.7 38.5 26.3 24.3 546.8 40.5 33.6 31.3 31.1 California Illinois New York Colorado Nevada Texas New California North Ohio Hampshire Carolina

Trade in $156 m Services $111 m U.S. Services Exports to Estonia, 2019 U.S. Services Imports from Estonia, 2019

Note: U.K. included in EU for purposes of calculating intra-EU trade. Sources: Bureau of Economic Analysis; U.S. Commerce Department; International Monetary Fund; Office of Trade and Economic Analysis.

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Finland and the United States

United States in Finland Finland in the United States

21,228 Jobs 36,283

Jobs directly supported by majority-owned affiliates. Estimates for 2019. Total U.S.-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

$3.7 bn Investment $14.8 bn Foreign Direct Investment (FDI), 2019 Foreign Direct Investment (FDI), 2019 The direct investment balance favors the United States, with Finnish investment in the U.S. rising in 2019 to over $14 billion. Total employment by Finnish companies in the U.S. have also risen substantially over the past few years from 23,000 in 2015 to over 36,000 in 2019. Finnish direct investment in the U.S. is heavily concentrated in the wholesale trade and manufacturing industries, representing 15% and 72% of total FDI, respectively. U.S. FDI Position in Finland Finland FDI Position in the U.S. Billion $ Billion $ 16 16 14 14 12 12 10 10 8 8 6 6 4 4 2 2 0 0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

Foreign direct investment position, historic-cost basis, 2000-2019.

$1.8 bn Trade in $6.4 bn Goods U.S. Goods Exports to Finland, 2019 U.S. Goods Imports from Finland, 2019 2.1% The U.S. supplied 7.5% …but the U.S. share 7.5% The U.S. received 7.5% 18.1% …but the U.S. share 2.1% of Finland's increases to 7.5% of the total goods increases to 18.1% total imports… when intra-EU trade Finland exported to when intra-EU trade is excluded from the the world… is excluded from the total. total.

Top Five U.S. Goods Exports to Finland ($ millions) Top Five U.S. Goods Imports from Finland ($ millions)

Computers & 385.1 Chemical 1,054.7 Electronic Prod. 621.1 Manufactures 171.8 293.6 897.6 Mining Machinery 93.0 Manufactures 474.6 Transportation 241.9 Petroleum & 851.8 Equipment 215.5 Coal Products 288.2 Chemical 224.3 Paper Products 818.1 Manufactures 76.7 702.6 Machinery 164.9 Transportation 786.1 Manufactures 161.5 Equipment 494.6 0 10 1,000 100,000 0 10 1,000 100,000

n 2019 n 2000 n 2019 n 2000

Top State Exporters of Goods to Finland ($ millions) Top State Importers of Goods from Finland ($ millions)

1 2 3 4 5 1 2 3 4 5 239.1 144.0 136.6 97.8 82.3 1,047.6 705.5 665.0 493.5 383.7 Texas California Michigan Georgia Ohio Pennsyl­ New Jersey Maryland Texas Georgia vania

Trade in $2.0 bn Services $1.8 bn U.S. Services Exports to Finland, 2019 U.S. Services Imports from Finland, 2019

Note: U.K. included in EU for purposes of calculating intra-EU trade. Sources: Bureau of Economic Analysis; U.S. Commerce Department; International Monetary Fund; Office of Trade and Economic Analysis.

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France and the United States

United States in France France in the United States

505,908 Jobs 799,460

Jobs directly supported by majority-owned affiliates. Estimates for 2019. Total U.S.-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

$83.8 bn Investment $282.2 bn Foreign Direct Investment (FDI), 2019 Foreign Direct Investment (FDI), 2019 The direct investment balance favors the U.S., with U.S. investment in France ($83.8 billion) just 30% of total French investment in the U.S. in 2019 ($282.2 billion). The U.S. is a significant market for French firms, with U.S. affiliates of French firms recording an estimated $337 billion in sales during 2019. The manufacturing sector makes up about 43% of French FDI in the U.S. In terms of jobs, U.S. and French affiliates combined employed over 1.3 million workers, with the employment balance favoring the U.S. by about 300,000 jobs, according to 2019 estimates. U.S. FDI Position in France France FDI Position in the U.S. Billion $ Billion $ 300 300 250 250 200 200 150 150 100 100 50 50 0 0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

Foreign direct investment position, historic-cost basis, 2000-2019.

$37.7 bn Trade in $57.6 bn Goods U.S. Goods Exports to France, 2019 U.S. Goods Imports from France, 2019 5.6% The U.S. supplied 17.6% …but the U.S. share 8.3% The U.S. received 19.9% …but the U.S. share 5.6% of France's increases to 17.6% 8.3% of the total increases to 19.9% total imports… when intra-EU trade goods France when intra-EU trade is excluded from the exported to the is excluded from the total. world… total.

Top Five U.S. Goods Exports to France ($ millions) Top Five U.S. Goods Imports from France ($ millions)

Transportation 14,690.9 Transportation 17,094.2 Equipment 5,005.1 Equipment 9,046.8 Chemical 4,512.8 Chemical 8,630.9 Manufactures 2,809.3 Manufactures 3,941.8 Computers & 3,262.1 Beverage & 5,119.3 Electronic Prod. 4,646.4 Tobacco Products 1,690.5 Oil & Gas 2,750.6 Machinery 3,403.3 Extraction 0.9 Manufactures 2,399.0 Machinery 2,024.7 Used 3,322.0 Manufactures 2,754.6 Merchandise 2,352.3 0 10 1,000 100,000 0 10 1,000 100,000

n 2019 n 2000 n 2019 n 2000

Top State Exporters of Goods to France ($ millions) Top State Importers of Goods from France ($ millions)

1 2 3 4 5 1 2 3 4 5 4,678.5 3,508.8 2,947.3 2,618.3 2,181.4 9,469.7 4,818.6 4,341.5 3,895.6 3,872.3 Texas Kentucky California North New York New York California New Jersey Florida Illinois Carolina

Trade in $22.4 bn Services $20.4 bn U.S. Services Exports to France, 2019 U.S. Services Imports from France, 2019

Note: U.K. included in EU for purposes of calculating intra-EU trade. Sources: Bureau of Economic Analysis; U.S. Commerce Department; International Monetary Fund; Office of Trade and Economic Analysis.

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Germany and the United States

United States in Germany Germany in the United States

685,886 Jobs 882,174

Jobs directly supported by majority-owned affiliates. Estimates for 2019. Total U.S.-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

$148.3 bn Investment $372.9 bn Foreign Direct Investment (FDI), 2019 Foreign Direct Investment (FDI), 2019 The investment balance favors the U.S., with Germany's investment in the U.S. more than 2.5 times the size of U.S. investment in Germany. Wholesale trade and transportation equipment manufacturing are the largest industries when it comes to German stock of FDI in the U.S., followed by finance and insurance. The value added by German affiliates in the United States ($135 billion) was higher than that of U.S. affiliates operating in Germany ($87 billion), according to 2019 estimates. The employment picture is relatively balanced, with affiliates of both countries employing a combined workforce of almost 1.6 million employees. U.S. FDI Position in Germany Germany FDI Position in the U.S. Billion $ Billion $ 400 400 350 350 300 300 250 250 200 200 150 150 100 100 50 50 0 0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

Foreign direct investment position, historic-cost basis, 2000-2019.

$60.1 bn Trade in $127.5 bn Goods U.S. Goods Exports to Germany, 2019 U.S. Goods Imports from Germany, 2019 4.9% The U.S. supplied 14.8% …but the U.S. share 9.0% The U.S. received 21.6% …but the U.S. share 4.9% of Germany's increases to 14.8% 9.0% of the total increases to 21.6% total imports… when intra-EU trade goods Germany when intra-EU trade is excluded from the exported to the is excluded from the total. world… total.

Top Five U.S. Goods Exports to Germany ($ millions) Top Five U.S. Goods Imports from Germany ($ millions)

Transportation 18,587.8 Transportation 30,696.1 Equipment 6,761.4 Equipment 21,239.5 Chemical 9,479.3 Chemical 26,098.5 Manufactures 2,617.2 Manufactures 6,528.7 Computers & 7,892.6 Machinery 22,475.4 Electronic Prod. 8,105.3 Manufactures 10,195.9 Machinery 4,895.3 Computers & 10,932.0 Manufactures 3,939.2 Electronic Prod. 5,482.7 Misc. 3,709.6 Elec. Equip., 5,573.5 Manufactures 1,059.8 Appliances & Parts 2,206.2 0 10 1,000 100,000 0 10 1,000 100,000

n 2019 n 2000 n 2019 n 2000

Top State Exporters of Goods to Germany ($ millions) Top State Importers of Goods from Germany ($ millions)

1 2 3 4 5 1 2 3 4 5 6,438.7 4,534.7 4,487.9 3,308.9 3,139.9 11,309.1 9,499.7 8,543.9 8,245.7 8,034.3 California Texas South Illinois Alabama California Georgia New Jersey Illinois Texas Carolina

$36.6 bn Trade in $34.9 bn Services U.S. Services Exports to Germany, 2019 U.S. Services Imports from Germany, 2019

Note: U.K. included in EU for purposes of calculating intra-EU trade. Sources: Bureau of Economic Analysis; U.S. Commerce Department; International Monetary Fund; Office of Trade and Economic Analysis.

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Greece and the United States

United States in Greece Greece in the United States

15,743 Jobs 3,792

Jobs directly supported by majority-owned affiliates. Estimates for 2019. Total U.S.-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

$938 m Investment $639 m Foreign Direct Investment (FDI), 2019 Foreign Direct Investment (FDI), 2018* Greece’s investment ties with the U.S. have rebounded since 2013. In 2019, America's foreign direct investment position in Greece dipped slightly below $1 billion. Greece's FDI position in the U.S. has also improved to $639 million in 2018, the latest year of available data. Estimated U.S. affiliate sales in Greece of $5.8 billion were three times greater than sales of Greek affiliates in the U.S. U.S. FDI Position in Greece Greece FDI Position in the U.S. Billion $ Billion $ 2.5 2.5 2.0 2.0 1.5 1.5 1.0 1.0 0.5 0.5 0 0 -0.5 -0.5 -1.0 -1.0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

Foreign direct investment position, historic-cost basis, 2000-2019. Note: Dotted line indicates that data has been suppressed for a particular year to avoid disclosure of individual company data. *Latest year of available data. Negative FDI positions can occur when the loans from the affiliate to the parent company exceed the equity and debt investments from the parent to the affiliate, or if a foreign affiliate incurs sufficiently large losses.

$1.4 bn Trade in $1.5 bn Goods U.S. Goods Exports to Greece, 2019 U.S. Goods Imports from Greece, 2019 2.2% The U.S. supplied 4.7% …but the U.S. share 3.9% The U.S. received 8.8% …but the U.S. share 2.2% of Greece's increases to 4.7% 3.9% of the total increases to 8.8% total imports… when intra-EU trade goods Greece when intra-EU trade is excluded from the exported to the is excluded from the total. world… total.

Top Five U.S. Goods Exports to Greece ($ millions) Top Five U.S. Goods Imports from Greece ($ millions)

Oil & Gas 395.4 Food & 382.6 Extraction 0.3 Kindred Products 95.9 Computers & 276.0 Primary Metal 282.6 Electronic Prod. 181.9 Manufactures 76.0 Chemical 134.9 Fabricated 151.9 Manufactures 85.4 Metal Products 26.6 Transportation 114.0 Non-Metallic 123.2 Equipment 331.7 Mineral Mfgs. 73.9 109.6 Petroleum & 112.1 Waste & Scrap 0.4 Coal Products 61.7 0 10 1,000 100,000 0 10 1,000 100,000

n 2019 n 2000 n 2019 n 2000

Top State Exporters of Goods to Greece ($ millions) Top State Importers of Goods from Greece ($ millions)

1 2 3 4 5 1 2 3 4 5 318.2 194.1 140.7 118.4 70.1 190.9 170.7 157.5 129.2 118.3 Texas Pennsyl­ Louisiana California Georgia Texas New Jersey New York California North vania Carolina

$1.6 bn Trade in $4.1 bn Services U.S. Services Exports to Greece, 2019 U.S. Services Imports from Greece, 2019

Sources: Bureau of Economic Analysis; U.S. Commerce Department; International Monetary Fund; Office of Trade and Economic Analysis.

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Hungary and the United States

United States in Hungary Hungary in the United States

69,066 Jobs 205

Jobs directly supported by majority-owned affiliates. Estimates for 2019. Total U.S.-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

$6.1 bn Investment $52.4 bn Foreign Direct Investment (FDI), 2019 Foreign Direct Investment (FDI), 2019 America's investment base in Hungary amounted to $6.1 billion in 2019, which was 7% lower than the prior year. U.S. affiliate employment in Hungary ranked fourth among EU13 countries. Value added by U.S.-owned affiliates totaled $3.9 billion in 2019, according to estimates. Meanwhile, Hungarian investment in the U.S. increased by 65% in 2019 to over $52 billion, though total investment remains below its peak of $70.7 billion in 2009.

U.S. FDI Position in Hungary Hungary FDI Position in the U.S. Billion $ Billion $ 80 80

60 60

40 40

20 20

0 0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

Foreign direct investment position, historic-cost basis, 2000-2019.

$1.9 bn Trade in $5.3 bn Goods U.S. Goods Exports to Hungary, 2019 U.S. Goods Imports from Hungary, 2019 1.7% The U.S. supplied 6.3% …but the U.S. share 2.4% The U.S. received 13.4% …but the U.S. share 1.7% of Hungary's increases to 6.3% 2.4% of the total increases to 13.4% total imports… when intra-EU trade goods Hungary when intra-EU trade is excluded from the exported to the is excluded from the total. world… total.

Top Five U.S. Goods Exports to Hungary ($ millions) Top Five U.S. Goods Imports from Hungary ($ millions)

Machinery 542.4 Transportation 1,430.9 Manufactures 74.8 Equipment 344.7 Computers & 489.5 Computers & 1,168.3 Electronic Prod. 183.5 Electronic Prod. 1,332.5 Transportation 289.6 Machinery 781.2 Equipment 51.9 Manufactures 129.1 Chemical 138.6 Elec. Equip., 535.7 Manufactures 32.6 Appliances & Parts 155.3 Elec. Equip., 85.8 Chemical 308.7 Appliances & Parts 30.2 Manufactures 439.0 0 10 1,000 100,000 0 10 1,000 100,000

n 2019 n 2000 n 2019 n 2000

Top State Exporters of Goods to Hungary ($ millions) Top State Importers of Goods from Hungary ($ millions)

1 2 3 4 5 1 2 3 4 5 324.7 172.4 159.7 134.2 120.5 548.0 529.4 505.1 456.0 455.8 Texas Georgia Indiana California Ohio Texas California South Michigan Georgia Carolina

$1.4 bn Trade in $1.0 bn Services U.S. Services Exports to Hungary, 2019 U.S. Services Imports from Hungary, 2019

Note: U.K. included in EU for purposes of calculating intra-EU trade. Sources: Bureau of Economic Analysis; U.S. Commerce Department; International Monetary Fund; Office of Trade and Economic Analysis.

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Ireland and the United States

United States in Ireland Ireland in the United States

136,710 Jobs 344,793

Jobs directly supported by majority-owned affiliates. Estimates for 2019. Total U.S.-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

$354.9 bn Investment $225.5 bn Foreign Direct Investment (FDI), 2019 Foreign Direct Investment (FDI), 2019 The investment balance favors Ireland, with U.S. investment in Ireland totaling some $355 billion in 2019 versus $226 billion of Irish investment in the U.S. Total U.S. FDI in Ireland fell again in 2019, as American companies continued to repatriate foreign profits after U.S. tax reform. Value added by U.S. affiliates in Ireland totaled an estimated $117 billion in 2019, almost double the gross product of Irish affiliates operating in the U.S. However, affiliate employment favored the United States, with Ireland's affiliates employing roughly 200,000 more Americans than U.S. affiliates employed in Ireland.

U.S. FDI Position in Ireland Ireland FDI Position in the U.S. Billion $ Billion $ 500 500 400 400 300 300 200 200 100 100 0 0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

Foreign direct investment position, historic-cost basis, 2000-2019.

$9.1 bn Trade in $61.9 bn Goods U.S. Goods Exports to Ireland, 2019 U.S. Goods Imports from Ireland, 2019 13.9% The U.S. supplied 38.8% …but the U.S. share 30.8% The U.S. received 58.3% …but the U.S. share 13.9% of Ireland's increases to 38.8% 30.8% of the total increases to 58.3% total imports… when intra-EU trade goods Ireland when intra-EU trade is excluded from the exported to the is excluded from the total. world… total.

Top Five U.S. Goods Exports to Ireland ($ millions) Top Five U.S. Goods Imports from Ireland ($ millions)

Chemical 3,146.8 Chemical 44,412.0 Manufactures 1,121.1 Manufactures 11,483.5 Computers & 1,494.0 Misc. 6,515.5 Electronic Prod. 3,298.9 Manufactures 571.8 Oil & Gas 994.6 Computers & 3,041.1 Extraction - Electronic Prod. 2,312.7 Misc. 907.2 Beverage & 1,000.9 Manufactures 369.8 Tobacco Products 263.6 Machinery 519.6 Machinery 637.4 Manufactures 689.5 Manufactures 267.0 0 10 1,000 100,000 0 10 1,000 100,000

n 2019 n 2000 n 2019 n 2000

Top State Exporters of Goods to Ireland ($ millions) Top State Importers of Goods from Ireland ($ millions)

1 2 3 4 5 1 2 3 4 5 1,155.5 1,117.3 709.6 483.9 482.2 9,174.8 7,812.9 4,339.8 4,262.0 4,255.5 Texas California Massa­ New Minnesota Indiana Tennessee New Jersey Kentucky Ohio chusetts Hampshire

$57.5 bn Trade in $23.2 bn Services U.S. Services Exports to Ireland, 2019 U.S. Services Imports from Ireland, 2019

Note: U.K. included in EU for purposes of calculating intra-EU trade. Sources: Bureau of Economic Analysis; U.S. Commerce Department; International Monetary Fund; Office of Trade and Economic Analysis

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Italy and the United States

United States in Italy Italy in the United States

253,919 Jobs 96,038

Jobs directly supported by majority-owned affiliates. Estimates for 2019. Total U.S.-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

$34.9 bn Investment $32.8 bn Foreign Direct Investment (FDI), 2019 Foreign Direct Investment (FDI), 2019 America's FDI position in Italy continued to climb in 2019, after having stalled since 2009. Meanwhile, Italian investment in the U.S. has been climbing steadily, up almost 400% since 2000. In 2019, Italy benefited more with regards to affiliate sales, value added and employment. For example, value added by U.S. affiliates in Italy was more than three times the value added of Italian companies in the U.S. Also, affiliates of U.S.- owned companies supported about 160,000 more jobs in Italy than Italian multinationals supported in the U.S., according to 2019 estimates.

U.S. FDI Position in Italy Italy FDI Position in the U.S. Billion $ Billion $ 40 40

30 30

20 20

10 10

0 0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

Foreign direct investment position, historic-cost basis, 2000-2019.

$23.8 bn Trade in $57.3 bn Goods U.S. Goods Exports to Italy, 2019 U.S. Goods Imports from Italy, 2019 4.0% The U.S. supplied 9.8% …but the U.S. share 9.6% The U.S. received 21.6% …but the U.S. share 4.0% of Italy's total increases to 9.8% 9.6% of the total increases to 21.6% imports… when intra-EU trade goods Italy exported when intra-EU trade is excluded from the to the world… is excluded from the total. total.

Top Five U.S. Goods Exports to Italy ($ millions) Top Five U.S. Goods Imports from Italy ($ millions)

Chemical 6,133.2 Chemical 11,061.4 Manufactures 2,093.5 Manufactures 2,669.8 Oil & Gas 3,080.3 Machinery 9,388.8 Extraction 0.2 Manufactures 4,015.6 Transportation 2,864.8 Transportation 7,440.6 Equipment 1,120.8 Equipment 1,345.0 Machinery 1,618.8 Leather & 3,051.2 Manufactures 1,597.3 Related Goods 1,870.8 Computers & 1,548.8 Misc. 2,912.6 Electronic Prod. 2,410.0 Manufactures 2,328.4 0 10 1,000 100,000 0 10 1,000 100,000

n 2019 n 2000 n 2019 n 2000

Top State Exporters of Goods to Italy ($ millions) Top State Importers of Goods from Italy ($ millions)

1 2 3 4 5 1 2 3 4 5 4,108.9 1,855.2 1,280.0 1,259.7 1,173.3 7,299.1 6,130.3 4,993.8 4,155.4 3,931.0 Texas California Florida Indiana Michigan New Jersey New York Pennsyl­ California Texas vania

$9.6 bn Trade in $12.1 bn Services U.S. Services Exports to Italy, 2019 U.S. Services Imports from Italy, 2019

Note: U.K. included in EU for purposes of calculating intra-EU trade. Sources: Bureau of Economic Analysis; U.S. Commerce Department; International Monetary Fund; Office of Trade and Economic Analysis.

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Latvia and the United States

United States in Latvia Latvia in the United States

1,320 Jobs < 50

Jobs directly supported by majority-owned affiliates. Estimates for 2019. Total U.S.-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

$38 m Investment $0 m Foreign Direct Investment (FDI), 2019 Foreign Direct Investment (FDI), 2017* The small country of roughly two million people has yet to attract significant foreign direct investment from the United States. U.S. FDI in Latvia has stalled since 2016, along with U.S. affiliate employment which remains the lowest in the EU. Foreign sales by U.S. firms in Latvia were $287 million in 2019, while sales by Latvian firms in the U.S. were just $3 million. U.S. FDI Position in Latvia Latvia FDI Position in the U.S. Billion $ Billion $ 0.10 0.10

0.05 0.05

0 0

-0.05 -0.05 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

Foreign direct investment position, historic-cost basis, 2000-2019. Note: Dotted line indicates that data has been suppressed for a particular year to avoid disclosure of individual company data. *Latest year of available data. Negative FDI positions can occur when the loans from the affiliate to the parent company exceed the equity and debt investments from the parent to the affiliate, or if a foreign affiliate incurs sufficiently large losses.

$552 m Trade in $815 m Goods U.S. Goods Exports to Latvia, 2019 U.S. Goods Imports from Latvia, 2019 0.9% The U.S. supplied 4.0% …but the U.S. share 1.5% The U.S. received 1.5% 4.6% …but the U.S. share 0.9% of Latvia's increases to 4.0% of the total goods increases to 4.6% total imports… when intra-EU trade Latvia exported to when intra-EU trade is excluded from the the world… is excluded from the total. total.

Top Five U.S. Goods Exports to Latvia ($ millions) Top Five U.S. Goods Imports from Latvia ($ millions)

Transportation 163.0 Transportation 398.0 Equipment 2.1 Equipment 0.0 Chemical 85.6 Beverage & 137.2 Manufactures 5.6 Tobacco Products 3.4 Computers & 64.6 Computers & 43.5 Electronic Prod. 15.9 Electronic Prod. 0.5 Beverage & 62.5 Petroleum & 36.9 Tobacco Products 3.6 Coal Products 175.4 Machinery 37.9 Machinery 35.9 Manufactures 8.9 Manufactures 2.9 0 10 1,000 100,000 0 10 1,000 100,000

n 2019 n 2000 n 2019 n 2000

Top State Exporters of Goods to Latvia ($ millions) Top State Importers of Goods from Latvia ($ millions)

1 2 3 4 5 1 2 3 4 5 134.6 73.6 45.1 44.8 44.5 254.7 196.3 51.4 46.2 37.8 Texas Alabama Georgia California Tennessee Texas Georgia California Maryland New York

$206 m Trade in $93 m Services U.S. Services Exports to Latvia, 2019 U.S. Services Imports from Latvia, 2019

Note: U.K. included in EU for purposes of calculating intra-EU trade. Sources: Bureau of Economic Analysis; U.S. Commerce Department; International Monetary Fund; Office of Trade and Economic Analysis.

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Lithuania and the United States

United States in Lithuania Lithuania in the United States

4,164 Jobs 0

Jobs directly supported by majority-owned affiliates. Estimates for 2019. Total U.S.-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

$171 m Investment -$4 m Foreign Direct Investment (FDI), 2019 Foreign Direct Investment (FDI), 2018* The U.S. FDI position in Lithuania remains small, but has more than doubled since the start of the century. U.S. affiliate employment in Lithuania has also been rising, with jobs rising from 2,200 in 2016 to an estimated 4,200 in 2019. Business conditions are favorable for foreign companies in Lithuania, with the country ranking 11th out of 190 economies listed in the World Bank's Ease of Doing Business Index.

U.S. FDI Position in Lithuania Lithuania FDI Position in the U.S. Billion $ Billion $ 0.2 0.2

0.1 0.1

0 0

-0.1 -0.1 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

Foreign direct investment position, historic-cost basis, 2000-2019. Note: Dotted line indicates that data has been suppressed for a particular year to avoid disclosure of individual company data. *Latest year of available data. Negative FDI positions can occur when the loans from the affiliate to the parent company exceed the equity and debt investments from the parent to the affiliate, or if a foreign affiliate incurs sufficiently large losses.

$0.9 bn Trade in $1.1 bn Goods U.S. Goods Exports to Lithuania, 2019 U.S. Goods Imports from Lithuania, 2019 1.5% The U.S. supplied 4.8% …but the U.S. share 3.7% The U.S. received 9.0% …but the U.S. share 1.5% of Lithuania's increases to 4.8% 3.7% of the total increases to 9.0% total imports… when intra-EU trade goods Lithuania when intra-EU trade is excluded from the exported to the is excluded from the total. world… total.

Top Five U.S. Goods Exports to Lithuania ($ millions) Top Five U.S. Goods Imports from Lithuania ($ millions)

Used 304.0 Petroleum & 477.7 Merchandise 0.5 Coal Products 8.6 Transportation 103.1 Chemical 184.3 Equipment 3.8 Manufactures 17.4 Chemical 93.0 Furniture & 123.1 Manufactures 5.9 Related Products 2.9 Computers & 91.3 Food & 51.1 Electronic Prod. 13.8 Kindred Products 35.4 Machinery 83.1 Computers & 50.1 Manufactures 5.9 Electronic Prod. 2.0 0 10 1,000 100,000 0 10 1,000 100,000

n 2019 n 2000 n 2019 n 2000

Top State Exporters of Goods to Lithuania ($ millions) Top State Importers of Goods from Lithuania ($ millions)

1 2 3 4 5 1 2 3 4 5 148.7 118.8 85.7 77.4 61.7 137.3 122.3 76.9 69.7 36.4 California Texas New York New Jersey Georgia Maryland New Jersey California Texas New York

$240 m Trade in $93 m Services U.S. Services Exports to Lithuania, 2019 U.S. Services Imports from Lithuania, 2019

Note: U.K. included in EU for purposes of calculating intra-EU trade. Sources: Bureau of Economic Analysis; U.S. Commerce Department; International Monetary Fund; Office of Trade and Economic Analysis; United Nations.

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Luxembourg and the United States

United States in Luxembourg Luxembourg in the United States

29,150 Jobs 19,987

Jobs directly supported by majority-owned affiliates. Estimates for 2019. Total U.S.-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

$766.1 bn Investment $297.1 bn Foreign Direct Investment (FDI), 2019 Foreign Direct Investment (FDI), 2019 Investment between the U.S. and Luxembourg is skewed in favor of Luxembourg. Estimated U.S. foreign affiliate sales in Luxembourg were about twelve times greater than sales of Luxembourg affiliates in the U.S. Although direct investment in the U.S. by Luxembourg- based companies has been trending upward, total affiliate employment has fallen from a peak of 38,300 in 2010 to an estimated 20,000 in 2019. This is in contrast to the 77% rise in U.S. affiliate employment in Luxembourg since 2010, and explains the large shift in the employment balance since the start of the decade.

U.S. FDI Position in Luxembourg Luxembourg FDI Position in the U.S. Billion $ Billion $ 800 800 700 700 600 600 500 500 400 400 300 300 200 200 100 100 0 0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

Foreign direct investment position, historic-cost basis, 2000-2019.

$1.9 bn Trade in $0.6 bn Goods U.S. Goods Exports to Luxembourg, 2019 U.S. Goods Imports from Luxembourg, 2019 3.2% The U.S. 20.9% …but the U.S. share 2.8% The U.S. received 17.0% …but the U.S. share supplied 3.2% of increases to 20.9% 2.8% of the total increases to 17.0% Luxembourg's total when intra-EU trade goods Luxembourg when intra-EU trade imports… is excluded from the exported to the is excluded from the total. world… total.

Top Five U.S. Goods Exports to Luxembourg ($ millions) Top Five U.S. Goods Imports from Luxembourg ($ millions)

Transportation 897.9 Primary Metal 168.1 Equipment 58.9 Manufactures 120.3 Used 406.7 Fabricated 69.4 Merchandise 2.7 Metal Products 73.6 Chemical 156.0 Plastic & 54.4 Manufactures 7.1 Rubber Products 32.3 Machinery 147.1 Chemical 44.3 Manufactures 40.0 Manufactures 9.3 Computers & 121.0 Transportation 37.6 Electronic Prod. 172.0 Equipment 2.6 0 10 1,000 100,000 0 10 1,000 100,000

n 2019 n 2000 n 2019 n 2000

Top State Exporters of Goods to Luxembourg ($ millions) Top State Importers of Goods from Luxembourg ($ millions)

1 2 3 4 5 1 2 3 4 5 355.9 284.5 239.3 212.8 106.8 52.3 49.9 49.0 43.0 41.5 New York Texas Florida Georgia California Texas New York Virginia New Jersey Georgia

$7.5 bn Trade in $1.7 bn Services U.S. Services Exports to Luxembourg, 2019 U.S. Services Imports from Luxembourg, 2019

Note: U.K. included in EU for purposes of calculating intra-EU trade. Sources: Bureau of Economic Analysis; U.S. Commerce Department; International Monetary Fund; Office of Trade and Economic Analysis.

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Malta and the United States

United States in Malta Malta in the United States

1,625 Jobs 1,230

Jobs directly supported by majority-owned affiliates. Estimates for 2019. Total U.S.-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

$0.6 bn Investment $2.0 bn Foreign Direct Investment (FDI), 2019 Foreign Direct Investment (FDI), 2019 Despite the country's tiny population (just 500,000 people), Malta has attracted a relatively large amount of foreign direct investment from the U.S. The investment position of the U.S. in Malta amounted to $579 million in 2019. In addition, American investment directly supported jobs for roughly 1,600 Maltese workers, according to 2019 estimates. Meanwhile, Malta's direct investment position in the U.S. was $2 billion in 2019, which is markedly higher from its near-zero levels of investment prior to 2010. U.S. FDI Position in Malta Malta FDI Position in the U.S. Billion $ Billion $ 2.5 2.5 2.0 2.0 1.5 1.5 1.0 1.0 0.5 0.5 0 0 -0.5 -0.5 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

Foreign direct investment position, historic-cost basis, 2000-2019. Note: Dotted line indicates that data has been suppressed for a particular year to avoid disclosure of individual company data.

$143 m Trade in $172 m Goods U.S. Goods Exports to Malta, 2019 U.S. Goods Imports from Malta, 2019 1.9% The U.S. supplied 7.2% …but the U.S. share 4.3% The U.S. received 8.9% …but the U.S. share 1.9% of Malta's total increases to 7.2% 4.3% of the total increases to 8.9% imports… when intra-EU trade goods Malta exported when intra-EU trade is excluded from the to the world… is excluded from the total. total.

Top Five U.S. Goods Exports to Malta ($ millions) Top Five U.S. Goods Imports from Malta ($ millions)

Transportation 74.0 Computers & 89.7 Equipment 15.6 Electronic Prod. 372.6 Petroleum & 16.5 Elec. Equip., 17.4 Coal Products 17.3 Appliances & Parts 8.7 Computers & 8.6 Chemical 13.4 Electronic Prod. 234.7 Manufactures 0.0 Machinery 8.1 Misc. 12.7 Manufactures 22.2 Manufactures 41.2 Chemical 6.5 Machinery 12.0 Manufactures 13.7 Manufactures 3.5 0 10 1,000 100,000 0 10 1,000 100,000

n 2019 n 2000 n 2019 n 2000

Top State Exporters of Goods to Malta ($ millions) Top State Importers of Goods from Malta ($ millions)

1 2 3 4 5 1 2 3 4 5 63.3 16.6 12.8 9.2 4.5 54.7 38.3 7.1 5.7 5.2 Georgia Mississippi California Texas Florida California Illinois Michigan Louisiana New Jersey

$1.4 bn Trade in $0.7 bn Services U.S. Services Exports to Malta, 2019 U.S. Services Imports from Malta, 2019

Note: U.K. included in EU for purposes of calculating intra-EU trade. Sources: Bureau of Economic Analysis; U.S. Commerce Department; International Monetary Fund; Office of Trade and Economic Analysis.

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Netherlands and the United States

United States in Netherlands Netherlands in the United States

266,818 Jobs 563,722

Jobs directly supported by majority-owned affiliates. Estimates for 2019. Total U.S.-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

$860.5 bn Investment $487.1 bn Foreign Direct Investment (FDI), 2019 Foreign Direct Investment (FDI), 2019 America’s investment stake in the Netherlands is almost double the amount of Dutch investment in the U.S. Still, the U.S. is a prime foreign destination for Dutch firms, which recorded an estimated $410 billion in affiliate sales in the U.S. during 2019, according to estimates. The employment balance clearly favors the U.S. with a large amount of jobs supported by Dutch firms in the U.S. Amsterdam was ranked by fDi Markets in 2020 as the 2nd most attractive city in Europe in terms of connectivity.

U.S. FDI Position in Netherlands Netherlands FDI Position in the U.S. Billion $ Billion $ 1000 1000

750 750

500 500

250 250

0 0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

Foreign direct investment position, historic-cost basis, 2000-2019.

$51.1 bn Trade in $29.7 bn Goods U.S. Goods Exports to Netherlands, 2019 U.S. Goods Imports from Netherlands, 2019 7.7% The U.S. 14.0% …but the U.S. share 4.7% The U.S. received 17.4% …but the U.S. share supplied 7.7% of increases to 14.0% 4.7% of the total increases to 17.4% Netherlands's total when intra-EU trade goods Netherlands when intra-EU trade imports… is excluded from the exported to the is excluded from the total. world… total.

Top Five U.S. Goods Exports to Netherlands ($ millions) Top Five U.S. Goods Imports from Netherlands ($ millions)

Chemical 10,863.9 Chemical 7,383.6 Manufactures 3,884.1 Manufactures 1,544.0 Computers & 7,743.7 Machinery 4,266.3 Electronic Prod. 7,744.0 Manufactures 1,556.6 Oil & Gas 7,261.4 Petroleum & 3,140.6 Extraction 0.3 Coal Products 524.1 Misc. 5,298.5 Computers & 1,484.5 Manufactures 935.1 Electronic Prod. 848.8 Transportation 3,712.0 Transportation 1,185.3 Equipment 2,311.2 Equipment 895.6 0 10 1,000 100,000 0 10 1,000 100,000

n 2019 n 2000 n 2019 n 2000

Top State Exporters of Goods to Netherlands ($ millions) Top State Importers of Goods from Netherlands ($ millions)

1 2 3 4 5 1 2 3 4 5 11,595.4 6,408.7 2,998.7 1,821.8 1,397.5 5,517.8 3,724.5 1,890.7 1,749.7 1,581.9 Texas California Louisiana Pennsyl­ Indiana Illinois New Jersey California Kentucky Texas vania

$20.5 bn Trade in $15.1 bn Services U.S. Services Exports to Netherlands, 2019 U.S. Services Imports from Netherlands, 2019

Note: U.K. included in EU for purposes of calculating intra-EU trade. Sources: Bureau of Economic Analysis; U.S. Commerce Department; International Monetary Fund; Office of Trade and Economic Analysis.

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Norway and the United States

United States in Norway Norway in the United States

43,065 Jobs 8,097

Jobs directly supported by majority-owned affiliates. Estimates for 2019. Total U.S.-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

$25.6 bn Investment $24.2 bn Foreign Direct Investment (FDI), 2019 Foreign Direct Investment (FDI), 2019 Norway's FDI in the U.S. fell slightly in 2019 to $26 billion, which is roughly equivalent to U.S. FDI in Norway. The employment balance, however, is heavily skewed in favor of Norway, with U.S. foreign affiliates employing roughly 43,000 Norwegian workers, according to 2019 estimates – a significant figure compared to the 8,000 workers employed by Norwegian companies in the U.S.

U.S. FDI Position in Norway Norway FDI Position in the U.S. Billion $ Billion $ 50 50 40 40 30 30 20 20 10 10 0 0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

Foreign direct investment position, historic-cost basis, 2000-2019.

$3.9 bn Trade in $6.5 bn Goods U.S. Goods Exports to Norway, 2019 U.S. Goods Imports from Norway, 2019 7.9% The U.S. supplied 20.1% …but the U.S. share 4.4% The U.S. received 20.6% …but the U.S. share 7.9% of Norway's increases to 20.1% when 4.4% of the total increases to 20.6% total imports… trade with the EU and goods Norway when trade with the U.K. is excluded from exported to the EU and U.K. is excluded the total. world… from the total.

Top Five U.S. Goods Exports to Norway ($ millions) Top Five U.S. Goods Imports from Norway ($ millions)

Transportation 760.8 Oil & Gas 1,306.9 Equipment 410.7 Extraction 3,513.4 Oil & Gas 556.1 Petroleum & 1,260.2 Extraction 0.1 Coal Products 433.9 Machinery 518.9 Chemical 702.1 Manufactures 277.7 Manufactures 269.9 Computers & 480.3 Primary Metal 599.4 Electronic Prod. 276.9 Manufactures 398.1 Chemical 298.0 Fishing, Hunting, 448.6 Manufactures 137.8 & Trapping 101.5 0 10 1,000 100,000 0 10 1,000 100,000

n 2019 n 2000 n 2019 n 2000

Top State Exporters of Goods to Norway ($ millions) Top State Importers of Goods from Norway ($ millions)

1 2 3 4 5 1 2 3 4 5 1,329.7 257.6 229.1 210.6 184.8 1,056.0 824.2 662.0 439.1 417.5 Texas California Louisiana Washington Georgia New Jersey Pennsyl­ Texas California Louisiana vania

$3.0 bn Trade in $2.5 bn Services U.S. Services Exports to Norway, 2019 U.S. Services Imports from Norway, 2019

Sources: Bureau of Economic Analysis; U.S. Commerce Department; International Monetary Fund; Office of Trade and Economic Analysis.

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Poland and the United States

United States in Poland Poland in the United States

207,198 Jobs 1,025

Jobs directly supported by majority-owned affiliates. Estimates for 2019. Total U.S.-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

$10.4 bn Investment $1.5 bn Foreign Direct Investment (FDI), 2019 Foreign Direct Investment (FDI), 2015* As one of the largest markets in central Europe, Poland has attracted significant sums of U.S. foreign direct investment. The estimated U.S. affiliate workforce of roughly 200,000 workers in Poland ranks number one among EU13 countries by a wide margin. U.S. companies added an estimated 3,000 Polish workers to their payrolls in 2019. Meanwhile, Polish companies have yet to make significant investments in the U.S., with just $1.5 billion investment recorded in the U.S. in 2015, the latest year with available data.

U.S. FDI Position in Poland Poland FDI Position in the U.S. Billion $ Billion $ 18 18 16 16 14 14 12 12 10 10 8 8 6 6 4 4 2 2 0 0 -2 -2 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

Foreign direct investment position, historic-cost basis, 2000-2019. Note: Dotted line indicates that data has been suppressed for a particular year to avoid disclosure of individual company data. *Latest year of available data.

$6.0 bn Trade in $8.4 bn Goods U.S. Goods Exports to Poland, 2019 U.S. Goods Imports from Poland, 2019 2.3% The U.S. supplied 7.4% …but the U.S. share 2.9% The U.S. received 14.1% …but the U.S. share 2.3% of Poland's increases to 7.4% 2.9% of the total increases to 14.1% total imports… when intra-EU trade goods Poland when intra-EU trade is excluded from the exported to the is excluded from the total. world… total.

Top Five U.S. Goods Exports to Poland ($ millions) Top Five U.S. Goods Imports from Poland ($ millions)

Transportation 1,898.3 Transportation 1,908.9 Equipment 44.9 Equipment 36.7 Computers & 697.9 Machinery 1,214.2 Electronic Prod. 251.6 Manufactures 129.1 Oil & Gas 515.7 Computers & 1,174.4 Extraction 0.0 Electronic Prod. 33.1 Machinery 440.8 Elec. Equip., 653.5 Manufactures 102.3 Appliances & Parts 74.2 Chemical 402.7 Food & 591.2 Manufactures 81.7 Kindred Products 90.0 0 10 1,000 100,000 0 10 1,000 100,000 n 2019 n 2000 n 2019 n 2000

Top State Exporters of Goods to Poland ($ millions) Top State Importers of Goods from Poland ($ millions)

1 2 3 4 5 1 2 3 4 5 786.6 615.3 362.1 308.2 236.3 995.7 735.5 515.3 503.0 470.6 Texas Washington California South Louisiana New Jersey New Illinois Texas Pennsyl­ Carolina Hampshire vania

$2.6 bn Trade in $2.2 bn Services U.S. Services Exports to Poland, 2019 U.S. Services Imports from Poland, 2019

Note: U.K. included in EU for purposes of calculating intra-EU trade. Sources: Bureau of Economic Analysis; U.S. Commerce Department; International Monetary Fund; Office of Trade and Economic Analysis.

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Portugal and the United States

United States in Portugal Portugal in the United States

32,400 Jobs 1,025

Jobs directly supported by majority-owned affiliates. Estimates for 2019. Total U.S.-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

$2.4 bn Investment $1.1 bn Foreign Direct Investment (FDI), 2019 Foreign Direct Investment (FDI), 2019 The investment balance is favored towards Portugal. U.S. direct investment in Portugal totaled $2.4 billion in 2019, which is largely concentrated in manufacturing, wholesale trade, and professional services. U.S. affiliates employed an estimated 32,400 Portuguese workers in 2019 compared to Portuguese affiliate employment of just 1,025 Americans. Since 2009, U.S. employment in Portugal has increased 12%, and Portuguese employment in the U.S. has risen by 105%. U.S. FDI Position in Portugal Portugal FDI Position in the U.S. Billion $ Billion $ 4 4 3 3 2 2 1 1 0 0 -1 -1 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

Foreign direct investment position, historic-cost basis, 2000-2019. Note: Dotted line indicates that data has been suppressed for a particular year to avoid disclosure of individual company data.

$1.7 bn Trade in $3.9 bn Goods U.S. Goods Exports to Portugal, 2019 U.S. Goods Imports from Portugal, 2019 1.8% The U.S. supplied 7.8% …but the U.S. share 5.1% The U.S. received 5.1% 21.0% …but the U.S. share 1.8% of Portugal's increases to 7.8% of the total goods increases to 21.0% total imports… when intra-EU trade Portugal exported to when intra-EU trade is excluded from the the world… is excluded from the total. total.

Top Five U.S. Goods Exports to Portugal ($ millions) Top Five U.S. Goods Imports from Portugal ($ millions)

Transportation 463.6 Petroleum & 812.7 Equipment 155.1 Coal Products 136.7 Oil & Gas 428.1 Chemical 346.5 Extraction 0.01 Manufactures 70.6 180.2 Apparel & 304.6 Crop Production 68.1 Accessories 91.3 Chemical 99.7 Computers & 261.6 Manufactures 48.3 Electronic Prod. 257.3 Machinery 79.5 Wood 226.6 Manufactures 84.2 Products 137.4 0 10 1,000 100,000 0 10 1,000 100,000

n 2019 n 2000 n 2019 n 2000

Top State Exporters of Goods to Portugal ($ millions) Top State Importers of Goods from Portugal ($ millions)

1 2 3 4 5 1 2 3 4 5 338.7 285.5 184.2 122.1 75.5 643.7 415.1 328.2 311.3 264.8 Louisiana Texas Pennsyl­ New Jersey Indiana New Jersey California South New York Connecticut vania Carolina

$1.6 bn Trade in $1.7 bn Services U.S. Services Exports to Portugal, 2019 U.S. Services Imports from Portugal, 2019

Note: U.K. included in EU for purposes of calculating intra-EU trade. Sources: Bureau of Economic Analysis; U.S. Commerce Department; International Monetary Fund; Office of Trade and Economic Analysis.

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Romania and the United States

United States in Romania Romania in the United States

77,191 Jobs < 50

Jobs directly supported by majority-owned affiliates. Estimates for 2019. Total U.S.-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

$3.5 bn Investment $0.0 bn Foreign Direct Investment (FDI), 2019 Foreign Direct Investment (FDI), 2019 While America's investment in Romania is small relative to other EU members, U.S. investment ties with Romania have deepened over the decade. U.S. affiliates have added roughly 40,000 Romanian workers to their payrolls since 2009, placing Romania 3rd among the EU13 countries in terms of jobs supported. Meanwhile, Romania's investment in the U.S. is relatively small. Romanian multinationals employed fewer than 50 employees in the U.S. in 2019.

U.S. FDI Position in Romania Romania FDI Position in the U.S. Billion $ Billion $ 5 5 4 4 3 3 2 2 1 1 0 0 -1 -1 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

Foreign direct investment position, historic-cost basis, 2000-2019. Note: Dotted line indicates that data has been suppressed for a particular year to avoid disclosure of individual company data.

$0.9 bn Trade in $2.4 bn Goods U.S. Goods Exports to Romania, 2019 U.S. Goods Imports from Romania, 2019 0.9%The U.S. supplied 3.7% …but the U.S. share 1.9% The U.S. received 1.9% 8.1% …but the U.S. share 0.9% of Romania's increases to 3.7% of the total goods increases to 8.1% total imports… when intra-EU trade Romania exported to when intra-EU trade is excluded from the the world… is excluded from the total. total.

Top Five U.S. Goods Exports to Romania ($ millions) Top Five U.S. Goods Imports from Romania ($ millions)

Computers & 212.0 Computers & 408.6 Electronic Prod. 52.4 Electronic Prod. 6.5 Machinery 150.8 Elec. Equip., 245.3 Manufactures 44.9 Appliances & Parts 14.8 Transportation 97.5 Transportation 231.4 Equipment 40.1 Equipment 6.4 Elec. Equip., 88.8 Primary Metal 212.3 Appliances & Parts 7.9 Manufactures 126.5 Petroleum & 64.4 Fabricated 211.3 Coal Products 2.6 Metal Products 37.9 0 10 1,000 100,000 0 10 1,000 100,000 n 2019 n 2000 n 2019 n 2000

Top State Exporters of Goods to Romania ($ millions) Top State Importers of Goods from Romania ($ millions)

1 2 3 4 5 1 2 3 4 5 113.8 98.1 76.5 58.8 57.0 367.5 232.0 149.4 138.1 126.6 Texas California New York North Louisiana Texas South Georgia Michigan New York Carolina Carolina

$812 m Trade in $622 m Services U.S. Services Exports to Romania, 2019 U.S. Services Imports from Romania, 2019

Note: U.K. included in EU for purposes of calculating intra-EU trade. Sources: Bureau of Economic Analysis; U.S. Commerce Department; International Monetary Fund; Office of Trade and Economic Analysis.

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Slovakia and the United States

United States in Slovakia Slovakia in the United States

46,823 Jobs < 50

Jobs directly supported by majority-owned affiliates. Estimates for 2019. Total U.S.-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

$925 m Investment -$10 m Foreign Direct Investment (FDI), 2019 Foreign Direct Investment (FDI), 2019* America's investment stock in Slovakia is relatively small (just $925 million), but foreign affiliate sales were $9.9 billion in 2019, according to estimates. Located in the heart of central Europe, Slovakia is well positioned to capture U.S. investment in areas such as distribution, transportation, wholesale trade and other service activities. U.S. foreign affiliates in Slovakia employed an estimated 47,000 workers overall, the 5th largest among the EU13 countries. Meanwhile, Slovakia's direct investment position in the U.S. was relatively small in 2019, and affiliate employment amounted to fewer than 50 workers. U.S. FDI Position in Slovakia Slovakia FDI Position in the U.S. Billion $ Billion $ 1.5 1.5

1 1

0.5 0.5

0 0

-0.5 -0.5 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

Foreign direct investment position, historic-cost basis, 2000-2019. Note: Dotted line indicates that data has been suppressed for a particular year to avoid disclosure of individual company data. *Negative FDI positions can occur when the loans from the affiliate to the parent company exceed the equity and debt investments from the parent to the affiliate, or if a foreign affiliate incurs sufficiently large losses.

$0.4 bn Trade in $5.1 bn Goods U.S. Goods Exports to Slovakia, 2019 U.S. Goods Imports from Slovakia, 2019 0.6% The U.S. supplied 3.3% …but the U.S. share 3.1% The U.S. received 3.1% 20.5% …but the U.S. share 0.6% of Slovakia's increases to 3.3% of the total goods increases to 20.5% total imports… when intra-EU trade Slovakia exported to when intra-EU trade is excluded from the the world… is excluded from the total. total.

Top Five U.S. Goods Exports to Slovakia ($ millions) Top Five U.S. Goods Imports from Slovakia ($ millions)

Transportation 97.5 Transportation 3,978.2 3.4 4.3 Equipment Equipment Machinery 73.7 Machinery 274.4 Manufactures 6.1 Manufactures 50.8 Computers & 68.9 Computers & 175.0 Electronic Prod. 62.1 Electronic Prod. 8.3 Fabricated 17.3 Plastic & 169.7 Metal Products 3.0 Rubber Products 28.5 Chemical 15.8 Fabricated 135.2 Manufactures 8.3 Metal Products 19.8 0 10 1,000 100,000 0 10 1,000 100,000

n 2019 n 2000 n 2019 n 2000

Top State Exporters of Goods to Slovakia ($ millions) Top State Importers of Goods from Slovakia ($ millions)

1 2 3 4 5 1 2 3 4 5 74.4 35.6 29.3 27.3 26.0 1,025.6 974.2 956.6 662.8 326.4 Georgia Pennsyl­ California Illinois Michigan California Rhode Texas Florida Georgia vania Island

$373 m Trade in $184 m Services U.S. Services Exports to Slovakia, 2019 U.S. Services Imports from Slovakia, 2019

Note: U.K. included in EU for purposes of calculating intra-EU trade. Sources: Bureau of Economic Analysis; U.S. Commerce Department; International Monetary Fund; Office of Trade and Economic Analysis.

165 - THE TRANSATLANTIC ECONOMY 2021 Appendix B - U.S. Commerce and Europe: A Country-by-Country Comparison

Slovenia and the United States

United States in Slovenia Slovenia in the United States

4,063 Jobs <50

Jobs directly supported by majority-owned affiliates. Estimates for 2019. Total U.S.-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

$286 m Investment $5 m Foreign Direct Investment (FDI), 2019 Foreign Direct Investment (FDI), 2019 U.S. foreign direct investment in Slovenia was $286 million in 2019, a small decrease from the prior year. Meanwhile, Slovenia's outward FDI stock in the U.S. was just $5 million, with affiliates supporting fewer than 50 jobs. U.S. direct investment in Slovenia supported about 4,000 jobs in 2019, but the employment figure has been declining since a recent peak in 2014 of 6,100 workers. Estimated U.S. foreign affiliate sales in Slovenia were $700 million in 2019, compared with just $2 million of foreign affiliate sales made by Slovenian firms in the U.S.

U.S. FDI Position in Slovenia Slovenia FDI Position in the U.S. Billion $ Billion $ 0.4 0.4

0.3 0.3

0.2 0.2

0.1 0.1

0 0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

Foreign direct investment position, historic-cost basis, 2000-2019. Note: Dotted line indicates that data has been suppressed for a particular year to avoid disclosure of individual company data.

$344 m Trade in $963 m Goods U.S. Goods Exports to Slovenia, 2019 U.S. Goods Imports from Slovenia, 2019 0.9% The U.S. supplied 2.4% …but the U.S. share 1.5% The U.S. received 1.5% 5.6% …but the U.S. share 0.9% of Slovenia's increases to 2.4% of the total goods increases to 5.6% total imports… when intra-EU trade Slovenia exported to when intra-EU trade is excluded from the the world… is excluded from the total. total.

Top Five U.S. Goods Exports to Slovenia ($ millions) Top Five U.S. Goods Imports from Slovenia ($ millions)

Fabricated 62.4 Chemical 219.7 Metal Products 8.5 Manufactures 22.0 Chemical 48.8 Primary Metal 124.4 Manufactures 21.2 Manufactures 27.3 Mining 34.0 Transportation 100.5 0.1 Equipment 10.4 Computers & 31.6 Machinery 97.1 Electronic Prod. 25.1 Manufactures 24.1 Machinery 28.7 Elec. Equip., 91.9 Manufactures 21.8 Appliances & Parts 41.5 0 10 1,000 100,000 0 10 1,000 100,000 n 2019 n 2000 n 2019 n 2000

Top State Exporters of Goods to Slovenia ($ millions) Top State Importers of Goods from Slovenia ($ millions)

1 2 3 4 5 1 2 3 4 5 74.1 56.6 28.0 20.1 16.8 144.7 87.7 69.7 56.0 47.3 Texas South California Georgia Louisiana New Jersey Pennsyl­ South Georgia Illinois Carolina vania Carolina

$175 m Trade in $70 m Services U.S. Services Exports to Slovenia, 2019 U.S. Services Imports from Slovenia, 2019

Sources: Bureau of Economic Analysis; U.S. Commerce Department; International Monetary Fund; Office of Trade and Economic Analysis; United Nations.

166 - THE TRANSATLANTIC ECONOMY 2021 Appendix B - U.S. Commerce and Europe: A Country-by-Country Comparison

Spain and the United States

United States in Spain Spain in the United States

178,556 Jobs 92,655

Jobs directly supported by majority-owned affiliates. Estimates for 2019. Total U.S.-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

$40.8 bn Investment $86.8 bn Foreign Direct Investment (FDI), 2019 Foreign Direct Investment (FDI), 2019 Since 2011, the investment balance shifted in favor of the U.S., as Spain's economy was squeezed by a severe recession and resulting austerity measures. Since then, U.S. direct investment in Spain has slightly recovered, amounting to $41 billion in 2019. Meanwhile, the U.S. has seen its inward FDI stock from Spain rise by almost 125% since 2009. Spanish investment in the U.S. has increased every year since 2002. U.S. affiliates based in Spain added roughly 2,800 workers to their payrolls in 2019, and employ about 1.9 times as many workers as Spanish affiliates employ in the U.S., according to estimates.

U.S. FDI Position in Spain Spain FDI Position in the U.S. Billion $ Billion $ 100 100 80 80 60 60 40 40 20 20 0 0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

Foreign direct investment position, historic-cost basis, 2000-2019.

$15.2 bn Trade in $16.8 bn Goods U.S. Goods Exports to Spain, 2019 U.S. Goods Imports from Spain, 2019 4.0% The U.S. supplied 9.5% …but the U.S. share 4.6% The U.S. received 13.4% …but the U.S. share 4.0% of Spain's increases to 9.5% 4.6% of the total increases to 13.4% total imports… when intra-EU trade goods Spain exported when intra-EU trade is excluded from the to the world… is excluded from the total. total.

Top Five U.S. Goods Exports to Spain ($ millions) Top Five U.S. Goods Imports from Spain ($ millions)

Chemical 3,386.9 Chemical 2,913.0 Manufactures 587.7 Manufactures 451.8 Oil & Gas 2,427.1 Transportation 1,950.5 Extraction 0.1 Equipment 346.2 Transportation 2,348.4 Machinery 1,624.8 Equipment 1,647.3 Manufactures 417.0 Crop 1,535.1 Food & 1,555.6 Production 439.9 Kindred 444.8 Petroleum & 1,034.8 Products 1,514.5 Coal Products 74.5 Petroleum & 363.4 Coal Products 0 10 1,000 100,000 0 10 1,000 100,000

n 2019 n 2000 n 2019 n 2000

Top State Exporters of Goods to Spain ($ millions) Top State Importers of Goods from Spain ($ millions)

1 2 3 4 5 1 2 3 4 5 2,758.4 1,782.6 1,527.9 809.1 638.9 2,216.1 1,627.0 1,481.8 1,405.8 1,219.6 Texas Louisiana California South North New Jersey Texas Florida New York Michigan Carolina Carolina

$8.7 bn Trade in $7.8 bn Services U.S. Services Exports to Spain, 2019 U.S. Services Imports from Spain, 2019

Sources: Bureau of Economic Analysis; U.S. Commerce Department; International Monetary Fund; Office of Trade and Economic Analysis.

167 - THE TRANSATLANTIC ECONOMY 2021 Appendix B - U.S. Commerce and Europe: A Country-by-Country Comparison

Sweden and the United States

United States in Sweden Sweden in the United States

75,262 Jobs 234,816

Jobs directly supported by majority-owned affiliates. Estimates for 2019. Total U.S.-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

$38.8 bn Investment $52.7 bn Foreign Direct Investment (FDI), 2019 Foreign Direct Investment (FDI), 2019 The investment balance favors the U.S., with Swedish direct investment in the U.S. totaling $52.7 billion, while the U.S. investment stock in Sweden was $38.8 billion in 2019. The value added of Swedish affiliates in the U.S. also exceeded that of U.S. foreign affiliates in Sweden. The employment balance is also heavily skewed in favor of the United States, with Swedish firms estimated to have employed over 230,000 U.S. workers in 2019.

U.S. FDI Position in Sweden Sweden FDI Position in the U.S. Billion $ Billion $ 60 60 50 50 40 40 30 30 20 20 10 10 0 0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

Foreign direct investment position, historic-cost basis, 2000-2019.

$4.4 bn Trade in $12.1 bn Goods U.S. Goods Exports to Sweden, 2019 U.S. Goods Imports from Sweden, 2019 3.0% The U.S. supplied 9.9% …but the U.S. share 8.0% The U.S. received 18.8% …but the U.S. share 3.0% of Sweden's increases to 9.9% 8.0% of the total increases to 18.8% total imports… when intra-EU trade goods Sweden when intra-EU trade is excluded from the exported to the is excluded from the total. world… total.

Top Five U.S. Goods Exports to Sweden ($ millions) Top Five U.S. Goods Imports from Sweden ($ millions)

Chemical 958.0 Transportation 2,901.8 Manufactures 289.2 Equipment 2,471.8 Transportation 638.6 Machinery 2,610.7 Equipment 1,573.9 Manufactures 1,680.9 Computers & 552.1 Chemical 1,700.6 Electronic Prod. 1,113.6 Manufactures 1,003.4 Machinery 499.5 Computers & 940.2 Manufactures 495.1 Electronic Prod. 1,376.1 Oil & Gas 224.1 Primary Metal 577.8 Extraction 0.02 Manufactures 389.4 0 10 1,000 100,000 0 10 1,000 100,000 n 2019 n 2000 n 2019 n 2000

Top State Exporters of Goods to Sweden ($ millions) Top State Importers of Goods from Sweden ($ millions)

1 2 3 4 5 1 2 3 4 5 603.8 360.1 241.8 234.5 231.7 1,378.5 899.5 860.4 856.5 719.5 California Texas Pennsyl­ Illinois Kentucky New Jersey Pennsyl­ Maryland California Kentucky vania vania

$6.7 bn Trade in $3.3 bn Services U.S. Services Exports to Sweden, 2019 U.S. Services Imports from Sweden, 2019

Note: U.K. included in EU for purposes of calculating intra-EU trade. Sources: Bureau of Economic Analysis; U.S. Commerce Department; International Monetary Fund; Office of Trade and Economic Analysis.

168 - THE TRANSATLANTIC ECONOMY 2021 Appendix B - U.S. Commerce and Europe: A Country-by-Country Comparison

Switzerland and the United States

United States in Switzerland Switzerland in the United States

101,872 Jobs 490,438

Jobs directly supported by majority-owned affiliates. Estimates for 2019. Total U.S.-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

$229.0 bn Investment $300.4 bn Foreign Direct Investment (FDI), 2019 Foreign Direct Investment (FDI), 2019 The investment balance favors the U.S.—direct investment stock in Switzerland totaled $229 billion in 2019 versus $300 billion of Swiss investment in the U.S. The largest industries for U.S.-Switzerland bi-lateral investment were finance and insurance, chemicals manufacturing and non-bank holding companies. Estimates show the employment balance significantly favors the United States, and that U.S. affiliates in Switzerland and Swiss affiliates in the U.S. each added thousands of additional workers to their payrolls in 2019.

U.S. FDI Position in Switzerland Switzerland FDI Position in the U.S. Billion $ Billion $ 320 320 280 280 240 240 200 200 160 160 120 120 80 80 40 40 0 0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

Foreign direct investment position, historic-cost basis, 2000-2019.

$17.9 bn Trade in $44.6 bn Goods U.S. Goods Exports to Switzerland, 2019 U.S. Goods Imports from Switzerland, 2019 6.8% The U.S. 16.7% …but the U.S. share 14.0% The U.S. received 28.0% …but the U.S. share supplied 6.8% of increases to 16.7% 14.0% of the total increases to 28.0% Switzerland's total when trade with the goods Switzerland when trade with the imports… EU and U.K. is excluded exported to the EU and U.K. is excluded from the total. world… from the total.

Top Five U.S. Goods Exports to Switzerland ($ millions) Top Five U.S. Goods Imports from Switzerland ($ millions)

Misc. 5,020.7 Chemical 19,994.6 Manufactures 913.7 Manufactures 2,218.0 Primary Metal 3,398.4 Computers & 5,317.3 Manufactures 3,487.3 Electronic Prod. 2,025.1 Chemical 2,755.1 Machinery 2,929.0 Manufactures 1,199.0 Manufactures 1,982.1 Used 1,842.1 Misc. 2,927.1 Merchandise 962.5 Manufactures 757.4 Transportation 1,511.6 Primary Metal 1,817.1 Equipment 906.8 Manufactures 359.2 0 10 1,000 100,000 0 10 1,000 100,000

n 2019 n 2000 n 2019 n 2000

Top State Exporters of Goods to Switzerland ($ millions) Top State Importers of Goods from Switzerland ($ millions)

1 2 3 4 5 1 2 3 4 5 6,179.2 1,790.3 1,311.6 1,091.6 605.1 6,838.2 6,570.1 6,368.6 4,883.8 2,505.7 New York California Nevada Massa­ New Jersey New Jersey Pennsyl­ New York Kentucky California chusetts vania

$46.8 bn Trade in $25.0 bn Services U.S. Services Exports to Switzerland, 2019 U.S. Services Imports from Switzerland, 2019

Sources: Bureau of Economic Analysis; U.S. Commerce Department; International Monetary Fund; Office of Trade and Economic Analysis.

169 - THE TRANSATLANTIC ECONOMY 2021 Appendix B - U.S. Commerce and Europe: A Country-by-Country Comparison

Turkey and the United States

United States in Turkey Turkey in the United States

57,589 Jobs 3,750* *range of 2,500-4,999

Jobs directly supported by majority-owned affiliates. Estimates for 2019. Total U.S.-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

$3.3 bn Investment $2.3 bn Foreign Direct Investment (FDI), 2019 Foreign Direct Investment (FDI), 2019 The investment balance favors Turkey — the U.S. had $3.3 billion of foreign direct investment in Turkey in 2019 versus Turkey's $2.3 billion of investment in the U.S. According to 2019 estimates, affiliates of U.S. multinationals had sales of $30.3 billion in Turkey compared to Turkey's affiliate sales in the U.S. of only $1.6 billion. U.S. affiliate employment in Turkey declined slightly in 2015, but has since rebounded and is now at all-time highs.

U.S. FDI Position in Turkey Turkey FDI Position in the U.S. Billion $ Billion $ 7 7 6 6 5 5 4 4 3 3 2 2 1 1 0 0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

Foreign direct investment position, historic-cost basis, 2000-2019. Note: Dotted line indicates that data has been suppressed for a particular year to avoid disclosure of individual company data.

$10.0 bn Trade in $10.6 bn Goods U.S. Goods Exports to Turkey, 2019 U.S. Goods Imports from Turkey, 2019 5.6% The U.S. supplied 8.7% …but the U.S. share 5.0% The U.S. received 9.7% …but the U.S. share 5.6% of Turkey's increases to 8.7% when 5.0% of the total increases to 9.7% when total imports… trade with the EU and goods Turkey trade with the EU and U.K. is excluded from exported to the U.K. is excluded from the total. world… the total.

Top Five U.S. Goods Exports to Turkey ($ millions) Top Five U.S. Goods Imports from Turkey ($ millions)

Transportation 3,096.8 Transportation 1,789.0 Equipment 1,369.4 Equipment 103.6 Chemical 1,222.2 Textile Mill 964.0 Manufactures 355.8 Products 264.9 1,071.4 Non-Metallic 813.4 Waste & Scrap 6.4 Mineral Mfgs. 166.2 1,016.8 Machinery 732.3 Crop Production 465.7 Manufactures 89.4 Computers & 636.1 Food & 719.8 Electronic Prod. 366.4 Kindred Products 87.3 0 10 1,000 100,000 0 10 1,000 100,000 n 2019 n 2000 n 2019 n 2000

Top State Exporters of Goods to Turkey ($ millions) Top State Importers of Goods from Turkey ($ millions)

1 2 3 4 5 1 2 3 4 5 1,532.5 1,419.3 848.8 781.9 574.2 1,420.4 1,152.9 1,015.6 974.2 688.0 Texas Washington New York California Georgia Texas California New York New Jersey Georgia

$4.2 bn Trade in $2.0 bn Services U.S. Services Exports to Turkey, 2019 U.S. Services Imports from Turkey, 2019

Sources: Bureau of Economic Analysis; U.S. Commerce Department; International Monetary Fund; Office of Trade and Economic Analysis.

170 - THE TRANSATLANTIC ECONOMY 2021 Appendix B - U.S. Commerce and Europe: A Country-by-Country Comparison

United Kingdom and the United States

United States in United Kingdom United Kingdom in the United States

1,487,457 Jobs 1,302,813

Jobs directly supported by majority-owned affiliates. Estimates for 2019. Total U.S.-related jobs are likely to be higher, because these figures do not include jobs created by trade flows, indirect employment effects through distributors or suppliers, or via non-equity arrangements such as strategic alliances, joint ventures, or other deals.

$851.4 bn Investment $505.1 bn Foreign Direct Investment (FDI), 2019 Foreign Direct Investment (FDI), 2019 In terms of the U.S.-U.K. investment balance, the U.S. had a larger cross-border impact in 2019. U.S. foreign direct investment in the United Kingdom totaled a record $851 billion in 2019, and the U.K.'s foreign direct investment in the U.S. remained flat at roughly $500 billion. Estimated sales of American and British affiliates in each other's markets were a combined $1.4 trillion in 2019. According to estimates for 2019, U.S. affiliates employed roughly 1.5 million workers in the U.K. while U.K. affiliates employed about 1.3 million Americans.

U.S. FDI Position in United Kingdom United Kingdom FDI Position in the U.S. Billion $ Billion $ 1000 1000 800 800 600 600 400 400 200 200

0 0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

Foreign direct investment position, historic-cost basis, 2000-2019.

$69.1 bn Trade in $63.2 bn Goods U.S. Goods Exports to United Kingdom, 2019 U.S. Goods Imports from United Kingdom, 2019 10.0% The U.S. supplied 19.8% …but the U.S. share 15.5% The U.S. received 28.8% …but the U.S. share 10.0% of United increases to 19.8% 15.5% of the total increases to 28.8% Kingdom's total when trade with the goods United when trade with the imports… EU is excluded from Kingdom exported to EU is excluded from the total. the world… the total.

Top Five U.S. Goods Exports to United Kingdom ($ millions) Top Five U.S. Goods Imports from United Kingdom ($ millions)

Transportation 13,082.9 Transportation 17,007.5 Equipment 8,118.4 Equipment 7,877.6 Primary Metal 12,328.4 Chemical 9,640.1 Manufactures 1,835.4 Manufactures 6,489.4 Chemical 6,580.8 Machinery 6,679.0 Manufactures 4,122.7 Manufactures 4,862.8 Oil & Gas 5,994.3 Computers & 4,030.4 Extraction 1.6 Electronic Prod. 5,714.8 Computers & 5,240.9 Petroleum & 2,435.0 Electronic Prod. 10,945.1 Coal Products 1,109.6 0 10 1,000 100,000 0 10 1,000 100,000

n 2019 n 2000 n 2019 n 2000

Top State Exporters of Goods United Kingdom ($ millions) Top State Importers of Goods from United Kingdom ($ millions)

1 2 3 4 5 1 2 3 4 5 9,617.9 8,751.8 5,314.7 5,262.8 3,552.6 6,259.2 5,501.8 5,501.6 5,495.2 5,006.6 Texas Utah New York California Kentucky California New York Texas Georgia New Jersey

$78.3 bn Trade in $62.3 bn Services U.S. Services Exports to United Kingdom, 2019 U.S. Services Imports from United Kingdom, 2019

Sources: Bureau of Economic Analysis; U.S. Commerce Department; International Monetary Fund; Office of Trade and Economic Analysis.

171 - THE TRANSATLANTIC ECONOMY 2021 Notes on Terms, Data and Sources

Employment, Investment, and Trade Linkages for the 50 U.S. States and Europe

Jobs data are from the U.S. Commerce Department’s Bureau of Economic Analysis (BEA). BEA employment by state is only available for Canada, France, Germany, Japan, the Netherlands, Switzerland, and the United Kingdom; for this reason, other countries may not be listed in this jobs section. Data on jobs is for majority owned bank and non-bank affiliates from 2007-2019, and nonbank affiliates from 1997-2006). Data on investment is from SelectUSA, a program led by the U.S. Department of Commerce, using data from fDi Markets. The data show number of Greenfield FDI projects announced over the span of ten years; Greenfield projects are investments in new assets and the number of projects does not directly translate to the value of projects or jobs added. Trade data comes from the U.S. Census Bureau’s USA Trade Online database as well as the International Trade Administration at the U.S. Commerce Department. Europe includes Albania, Andorra, Armenia, Austria, Azerbaijan, Belarus, Belgium, Bosnia-Herzegovina, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Faroe Islands, Finland, France, Georgia, Germany, Gibraltar, Greece, Hungary, Iceland, Ireland, Italy, Kazakhstan, Kosovo, Kyrgyzstan, Latvia, Liechtenstein, Lithuania, Luxembourg, North Macedonia, Malta, Moldova, Monaco, Montenegro, Netherlands, Norway, Poland, Portugal, Romania, Russia, San Marino, Serbia, Slovakia, Slovenia, Spain, Svalbard, Sweden, Switzerland, Tajikistan, Turkey, Turkmenistan, Ukraine, United Kingdom, Uzbekistan, Vatican City. The top ten exports and imports bar charts employ a logarithmic scale to facilitate cross-state comparisons.

Investment and Trade for the EU 27, UK, Norway, Switzerland, Turkey and the U.S.

Investment and jobs data are from the Bureau of Economic Analysis, with employment figures representing author estimates for 2019. Dotted lines on the FDI trend for certain countries indicate that data was unavailable for that time period. Data on exports and imports of goods and services are from the U.S. Commerce Department. The bar charts employ logarithmic scales to facilitate cross- country comparisons. Data on trade exports and imports by state were extracted from the U.S. Census Bureau’s USA Trade Online database. The data representing the United States’ share of imports and exports were constructed using data from the International Monetary Fund’s Direction of Trade Statistics database.

Foreign direct investment (FDI) measures the direct investment position between foreign affiliates and their parent companies. These statistics specifically measure the U.S. or European parent’s share, or interest, in its foreign affiliate rather than overall size or level of operations of the foreign affiliate. The U.S. direct investment position abroad is equal to the value of U.S. par¬ents’ equity in, and net outstanding loans to, their foreign affiliates at historical cost.

Total assets, employment, sales, research & development, and value-added statistics are sourced from the BEA’s Survey of Activities of Multinational Enterprises. These statistics on the activities of majority- owned foreign affiliates are not adjusted for the ownership share of the parent company. Thus, for example, the employment statistics include all the employees of each affiliate, including affiliates in which the U.S. parent’s ownership share is less than 100 percent. Total assets on a majority-owned foreign affiliate’s balance sheet measures the affiliate’s total assets, including the share of assets not owned by the U.S. parent.

Majority-owned foreign affiliates are affiliates that are more than 50 percent owned by their U.S. parent. Majority-owned U.S. affiliates are affiliates that are more than 50 percent owned by the European parent company.

172 - THE TRANSATLANTIC ECONOMY 2021 Digital Services

Information and communications technology (ICT) services, or digital services, are services used to facilitate information processing and communication. The U.S. Bureau of Economic Analysis (BEA) defines digital services as including three categories of international trade in services: telecommunications services, computer services, and charges for the use of intellectual property associated with computer software. Digitally enabled services, or potentially ICT-enabled services, are services that can be, but not necessarily are, delivered remotely over ICT networks. These include the three categories defined above for digital services plus: insurance services, financial services, all charges for the use of intellectual property, information services, research and development, professional and management consulting, architectural and engineering services, industrial engineering, training services, and other business services not included elsewhere.

E-Commerce

Most estimates of e-commerce do not distinguish whether such commerce is domestic or international. In addition, many metrics do not make it clear whether they cover all modes of e-commerce or only the leading indicators of business-to-business (B2B) and business-to-consumer (B2C) e-commerce. Finally, there are no official data on the value of cross-border e-commerce sales broken down by mode; official statistics on e-commerce are sparse and usually based on surveys rather than on real data. The U.S. International Trade Commission (ITC) defines global e-commerce as the sale of goods and services over the internet.

Terms

Throughout this report, the terms “EU,” “EU27” or “EU (excluding UK)” refers to all 27 member states of the European Union, excluding the United Kingdom. The terms “EU28” or “EU (including UK)” includes all 27 member states of the European Union plus the United Kingdom. The term EU15 refers to older EU member states: United Kingdom, Ireland, Belgium, Luxembourg, the Netherlands, Austria, Spain, Italy, Greece, France, Germany, Portugal, Sweden, Finland, and Denmark. The term EU13 refers to newer EU member states: Estonia, Latvia, Lithuania, Poland, the Czech Republic, Slovakia, Hungary, Slovenia, Malta, Cyprus, Romania and Bulgaria, and Croatia. The “euro area” includes those EU member states that have adopted the euro as their currency: Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Portugal, Slovakia, Slovenia, and Spain.

In addition to the above, the term “Europe” in this report refers to the following: all 27 members of the European Union plus Albania, Andorra, Armenia, Azerbaijan, Belarus, Bosnia and Herzegovina, Georgia, Gibraltar, Greenland, Iceland, Kazakhstan, Kosovo, Kyrgyzstan, Macedonia, Malta, Moldova, Monaco, Montenegro, Norway, Russia, Serbia, San Marino, Switzerland, Turkey, Tajikistan, Turkmenistan, Ukraine, the United Kingdom, Uzbekistan, and Vatican City.

173 - THE TRANSATLANTIC ECONOMY 2021 About the Authors

Daniel S. Hamilton and Joseph P. Quinlan have been producing The Transatlantic Economy annual survey since 2004. They have authored and edited a series of award-winning books and articles on the modern transatlantic economy, including Atlantic Rising: Changing Commercial Dynamics in the Atlantic Basin; Germany and Globalization; France and Globalization; Globalization and Europe: Prospering in a New Whirled Order; Sleeping Giant: Awakening the Transatlantic Services Economy; Protecting Our Prosperity: Ensuring Both National Security and the Benefits of Foreign Investment in the United States; Deep Integration: How Transatlantic Markets are Leading Globalization; and Partners in Prosperity: The Changing Geography of the Transatlantic Economy. Together they were recipients of the 2007 Transatlantic Leadership Award by the European-American Business Council and the 2006 Transatlantic Business Award by the American Chamber of Commerce to the European Union.

Daniel S. Hamilton is the Austrian Marshall Plan Foundation Distinguished Fellow and Director of the Global Europe Program at the Woodrow Wilson Center. He is also a faculty member and Senior Fellow at the Foreign Policy Institute of Johns Hopkins University’s Paul H. Nitze School of Advanced International Studies. He serves as Richard von Weizsäcker Fellow at the Robert Bosch Academy in Berlin. He was the Founding Director of the SAIS Center for Transatlantic Relations and for 15 years served as Executive Director of the American Consortium on EU Studies. He is President of the Transatlantic Leadership Network, and has been a consultant for Microsoft and an advisor to the U.S. Business Roundtable, the Transatlantic Business Dialogue, and the European-American Business Council. Recent books include The Arctic and World Order; Exiting the Cold War, Entering a New World; and Open Door: NATO and Euro-Atlantic Security After the Cold War, each edited with Kristina Spohr; Europe Whole and Free: Vision and Reality; Turkey in the North Atlantic Marketplace: Creating a North Atlantic Marketplace: Three Paths, One Detour, A U-Turn and the Road to Nowhere; The Transatlantic Digital Economy 2017; Rule-Makers or Rule- Takers? Exploring the Transatlantic Trade and Investment Partnership, edited with Jacques Pelkmans; Domestic Determinants of Foreign Policy in the European Union and the United States, edited with Teija Tiilikainen; Forward Resilience: Protecting Society in an Interconnected World; and The Geopolitics of TTIP. He has served as U.S. Deputy Assistant Secretary of State and Associate Director of the Policy Planning Staff for two U.S. Secretaries of State.

Joseph P. Quinlan is Senior Fellow at the Transatlantic Leadership Network, with extensive experience in the U.S. corporate sector. He is a leading expert on the transatlantic economy and well-known global economist/strategist on Wall Street. He specializes in global capital flows, international trade and multinational strategies. He lectures at Fordham University, and his publications have appeared in such venues as Foreign Affairs, the Financial Times and the Wall Street Journal. He is the author of The Last Economic Superpower: The Retreat of Globalization, the End of American Dominance, and What We Can Do About It (New York: McGraw Hill, 2010).

174 - THE TRANSATLANTIC ECONOMY 2021

THE TRANSATLANTIC ECONOMY 2021 Annual Survey of Jobs, Trade and Investment between the United States and Europe

Daniel S. Hamilton and Joseph P. Quinlan

The Transatlantic Economy 2021 annual survey offers the most up-to-date set of facts and figures describing the deep economic integration binding Europe and the United States. It documents European-sourced jobs, trade and investment in each of the 50 U.S. states, and U.S.-sourced jobs, trade and investment in each member state of the European Union and other European countries. It reviews key headline trends and helps readers understand the distinctive nature of transatlantic economic relations.

Key sectors of the transatlantic economy are integrating as never before, underpinning a multi-trillion-dollar economy that generates millions of jobs on both sides of the Atlantic and is registering heightened growth opportunities, despite a whirlwind of political uncertainty about the direction of U.S., EU and UK policies.

The Transatlantic Economy 2021 explains • what trade spats, COVID-19 and Brexit mean for the transatlantic economy • how U.S.-European commercial relations compare with those each has with China and other rising powers • how the digital economy is powering economic relations, and • how decision-makers and business leaders can address current opportunities and challenges.

The Transatlantic Economy 2021 provides key insights about the United States and Europe in the global economy, with often counterintuitive connections with important implications for policymakers, business leaders, and local officials.

Supporting partners

Foreign Policy Institute

The Paul H. Nitze School of Advanced International Studies $30.00 The Johns Hopkins University ISBN 978-1-947661-10-3 www.transatlanticrelations.org 53000>

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